Insurance is mandatory and a legal requirement for any business. However, for small business owners it is important to know what exactly will optimize their needs. There are some insurance that might be required for a specific small business but not for another. It will not be prudent to take out insurance and pay high premiums if it is not relevant for that particular field.
What then are the insurance options for small businesses?
General Liability Insurance – This is obligatory even for small home based businesses. It protects you from damages and is a defence if you or your employees or your products and services have caused any physical harm or property damage to a third party. An example will illustrate this point better. If you are an owner of a beauty clinic and one of your technicians causes injury to a client while wrongly using an IPL machine, you will be protected against any damage filed by the client. This is definitely a must have for you.
Loss or Damage of Equipment Insurance – The premises and the talented workforce that carry out your business activities are an important part, but the equipment such as IPL hair removal machine and other such machines you use could be considered the most integral part of your business. Therefore it is essential to ensure that they are properly insured for its value so that if it is damaged or stolen you can replace it immediately without any lengthy lack of functionality.
Business Owner’s Policy (BOP) – This is a very flexible insurance policy and covers almost all aspects that a business owner might possibly need. The options here are business interruption insurance, property insurance, vehicle coverage, liability insurance and crime insurance. You can mix and match and customise a policy to suit your specific requirements. A small business owner will cut down insurance costs since choosing particular sections from this policy will cost less than taking out same individual coverage.
Commercial Auto Insurance – Most small businesses will have vehicles that are required for carrying out operations. These fall under commercial vehicle category and are primarily used to carry equipment, products and employees. With this insurance you can take coverage of your cars, SUVs, mini-vans or trucks against damage from collisions or any other form of accidents. If you do not have commercial vehicles of your company, you can take out a non-owned auto liability to safeguard your company in case the employee does not have insurance or even low coverage. You can add the non-owned part of auto insurance to your BOP.
Property Insurance – If your small business operates out of your own building or you have substantial business property such as expensive office equipment, computers and your inventory this policy should be compulsory for you. It will safeguard against losses from fire and smoke, vandalism and theft and any other similar eventuality. You can also opt to have business interruption and loss of earning insurance should your business operations face a setback and is unable to run smoothly.
Data Breach – In this Internet driven digital business environment of today, any business big or small stores a lot of information in electronic form that is strictly outside the purview of the public at large. But hacking and data breach are also common occurrences today and you will do well to protect yourself from damages filed against you in these cases. In such circumstances, a data breach policy will protect you against looses.
Workers Compensation – This policy provides insurance to those who are injured on the job. It provides wages replacement and medical benefits and in lieu of that the employee agrees not to use his rights to sue the employer. It is crucial that as a small business owner you have this insurance to insulate your business against unnecessary litigation and disputes. State laws very clearly stipulate that you have this insurance cover and not doing so attracts harsh and stiff penalties.
It is now up to you to choose covers that will optimize your needs.