Don’t let your business be a statistic: 40% of small businesses have no insurance coverage at all. Even with businesses that do have insurance, only 75% of them are adequately insured.
Can you afford to go without any insurance? Or without the right type of insurance?
Without adequate coverage, your business could be at serious risk of shutting down when things do wrong.
But before you start your insurance shopping, you need to know what types of business insurance are right for you. Here are the common types of business insurance you may need.
The Essential Types of Business Insurance
First, let’s talk about the essentials. Generally speaking, any business will want three essential types of coverage:
- Business income insurance
- Commercial property insurance
- General liability insurance
These three types of coverage are often rolled into one plan. This is referred to as a BOP or Business Owner’s Policy.
Business income insurance covers lost income due to property damage or other situations that would prevent you from operating your business. This insurance can cover lost income, rent, payroll, and taxes. It may also be referred to as business interruption insurance.
Commercial property insurance protects the building and property that you rent or own, as well as your equipment. It may cover losses due to fire, theft, burglary, and wind.
General liability insurance protects your business from claims such as personal injury, property damage to another’s belongings, and bodily injury to someone else.
Additional Business Insurance Types
Depending on the type of business you have, as well as where you are located, you may require additional types of insurance.
For example, commercial property insurance does not protect against natural disasters. So if you live in an area prone to flooding, commercial flood insurance would be advised.
Small business insurance is important too, even for home-based businesses. Check your existing homeowner’s insurance for what, if anything they cover for business equipment or property stored in your home. They likely only offer very limited coverage, so you may want to seek more comprehensive coverage via an in-home business policy.
Other business insurance coverage you may want include commercial auto insurance, business overhead expense or BOE insurance, key person insurance, and workers’ compensation insurance.
Finding Good Insurance
A quick note on choosing insurance coverage: do your research. There are plenty of insurance providers out there, and many will offer a free quote either online or after a phone consultation.
Don’t forget to read client testimonials too. After all, who better to tell you about how good the insurance is than business owners who have had to use it?
Choosing Your Business Insurance
At the very least, do your research for a good insurer that offers a BOP that covers the essentials: business income, commercial property, and general liability. From there, look at other types of business insurance that may suit your specific needs.
Looking for more business tips? Check out the finance section of our site for more info on how to make your business successful.