Insurance 101 for small business owners
Some small business owners believe they have protected themselves from liability by forming an LLC, but that may not be sufficient to keep you adequately protected. Small business liability insurance is a necessity if you want the peace of mind that both your personal and professional assets are secure in the event of a business misstep or other detrimental event.
Protect yourself and your business by learning about what types of coverage are available, and the steps you should take to implement an insurance plan.
Keep it simple
These essential types of coverage may protect a small business owner from the most common threats to their livelihoods.
- General liability
Whether you rent a large warehouse, or are the next Microsoft operating out of a garage, small business liability insurance is necessary to help protect your business in the event that employees or third parties are subject to bodily injury or property damage. - Property
Does your business own anything physical? This could be as big as a building; it could be as small as a laptop computer. Fires, vandalism, theft, and other threats to physical assets may be covered by property insurance. - Professional liability
People make mistakes, and you need to protect yourself from that possibility. Also known as Errors and Omissions insurance, this coverage may fill gaps in areas not covered by a small business liability policy. - Special endorsements
Areas of business are like snowflakes – no two are alike. Some industries require, or encourage, additional coverage for specific scenarios that don’t apply equally to all products and services.
Step it up
Every business decision requires a complicated evaluation of risk and benefit. The following coverage types may not be essential to protecting your small business, but they are all worth considering.
- Workers compensation
Workers’ Compensation insurance can be a great win-win for employers and their employees. When a worker is injured on the job, this coverage could assist them with salary replacement and medical expenses, while simultaneously insulating the employer from lawsuits. - Commercial auto
If employees regularly operate a motor vehicle in the course of their duties, commercial auto insurance may protect you from damages related to an on-the-job auto accident. - Data breach
Data breaches, like the one Equifax experienced, can be costly. If your business stores sensitive personal data, then data breach insurance may limit otherwise significant liability for your small business. - Directors and officers
Remember when we said people make mistakes? If a director or officer of a small company makes a big mistake and finds themselves subject to legal action, your small business may be protected for eligible losses, assuming you are up-to-date with Directors and Officers insurance. - Product insurance
If you make and sell products, this coverage may be key to insulating you from potential losses arising from product defects and other product-related damages.
How to…
There are so many commercial insurance options, you might be unsure of where to start. The first step is to evaluate your risks. Whether you are just starting your venture, or have been in business for years and only now have decided to insure your valuable enterprise, take the time to document all potential threats to your operations.
Once you’ve taken a wide-angle view of your risks, it’s time to find an agent who can guide you to the coverage that may best protect you without having a large financial impact on your day-to-day operations.
And after you engage an agent and purchase coverage, it’s important to keep that relationship active. With the security of a comprehensive insurance package in hand, you can enjoy the freedom of safely growing your business. As your business grows, your needs may shift. Make sure that your licensed insurance agent is ready to regularly re-evaluate your needs.
UFG is the reliable collaborative insurance company you need. We have options for a variety of businesses, but take the time to learn what’s best for yours. We have provided business liability insurance for over 70 years, and are ready to offer the protection that can help your business succeed for another 70 years, or more! Contact an agent today to get started.
