Unexpected incidents are an unfortunate reality for business owners. You’ve invested time and money into growing your business, so it’s crucial to get insurance coverage to protect everything you’ve worked so hard for.
Sometimes small business owners think that because they have personal insurance, they would be covered if something happened with their business. But personal insurance is unlikely to cover business-related expenses.
So how do you know what type of insurance to get and how much coverage you need?
Consider Your Assets, Inventory and Equipment
Some businesses might operate very lean with little equipment needed. If you are able to operate your business with a single computer, it might be easy to replace on your own if something happens.
However, most businesses have technology, inventory and other equipment that can add up to a major loss if something happened. If you can’t afford to easily replace the items your business needs to function, then you need to cover those items with the appropriate insurance policy.
Protect Against Data Breaches
Scammers are relentless. They constantly come up with new ways to steal data for malicious purposes. Even the biggest companies have fallen victim to data breaches.
But for a small business, a data breach could be catastrophic. Many small businesses end up closing after a data breach. Insurance coverage can protect your business and make sure that you’re covered in the event of a breach.
Provide Support in the Event of Legal Action
There are many reasons why businesses get sued. If a product is defective and someone gets hurts, you could face legal action. Or if someone falls on your property and gets injured, that could lead to a lawsuit.
Without the right insurance, your business could take a major hit if you are sued for large amounts of money.
Business Insurance Types
Here are some of the most common business insurance types to help you determine what kind of coverage your business needs:
- Property insurance protects against damages or loss to your business property if there is a fire, theft, vandalism or certain weather-related damage
- Cyber liability insurance offers liability coverage in the event of a data breach at your business
- Liability insurance provides broad coverage to protect businesses if accidents or injuries occur on business property or with business products
- Professional liability insurance, also known as errors and omissions insurance, provides liability coverage in the event of negligence, errors or malpractice from professional service providers
- Product liability insurance provides protection for businesses like retailers, manufacturers, and distributors
- Worker’s compensation insurance is coverage that many states require to protect employees with medical expenses and some wage reimbursement if a work-related injury occurs
- Commercial auto insurance covers business vehicles if the vehicle causes damage or gets damaged or if an auto accident causes injury