Your Guide to Small Business Insurance

How much small business insurance is enough? At Guild Insurance Brokers & HMS Insurance Agencies, we hear this question often, especially from small business owners and entrepreneurs. Certainly, the landscape of business insurance can be a difficult one to navigate. There are many different types of coverage to consider and determining what you need isn’t always straightforward. This blog post is meant to help you learn the ropes so you can make the right decisions regarding your small business insurance coverage.

Types of Small Business Insurance Coverage

Before we dig into the different types of insurance coverage available to businesses, it’s important to note that shopping for business insurance is a balancing act between choice and necessity. There are types of insurance you may choose to have, depending on the level of protection you want. Similarly, there are likely types of coverage your business is legally required to have, depending on your industry. Be aware of these requirements by doing research online, speaking with a lawyer, or consulting with a professional insurance broker.

Property and Assets

Every business has assets it needs to protect from financial loss. From your building to the vehicles your employees use for business functions. These assets are a major part of your business’s value and its ability to earn revenue. Several types of business insurance are designed to protect these assets and repair or replace them in case of disaster. These include:

Commercial Property Insurance

Covers buildings and other real estate property owned by your business in case of fire and similar disasters.

Business Contents Insurance

Covers assets contained or stored inside your business premises, e.g. furniture, inventory, computers, electronics, equipment and more.

Commercial Auto Insurance

Covers cars, trucks or other vehicles owned and used by your business.

Liability

If an employee, a customer or a bystander ends up hurt due to an incident involving your business, you can be sued and held legally responsible. Liability coverage is a must to protect your business in such situations. Liability policies may include:

General Liability Insurance

A general liability insurance policy coverage kicks in if someone gets hurt on your company premises or property damage to a third party caused by the service you provide or product you sell.

Product Liability

If a product your company makes turns out to be defective. Product liability insurance would help cover medical and legal costs in situations where the defective product led to user injuries.

Errors & Omissions Coverage

Professional liability insurance, or Errors & Omissions insurance, protects against claims of alleged negligence. In industries where the company is providing advice or professional services, it can help cover legal costs and damages awarded in civil lawsuits. Professionals who need E&O coverage include IT Consultants, Internet Consultants, Lawyers, Investment Brokers and Professional Consultants.

Cyber Liability

It protects your business in the case of a hack or cyber breach. Customers, clients or employees can sue your business if it compromises their personal data. Cyber liability helps cover legal costs and damages in such cases.

Workers’ Compensation Insurance

Workers’ comp helps pay for medical costs and salary replacement in situations where employees get hurt on the job. Usually, by accepting workers’ comp payments, employees waive their right to sue your company for negligence.

Business Interruption

Interruptions to your business can be extremely costly. Policies in this category help cover those costs and make it easier for companies to survive gaps in operation. There are two main coverage types here. They include:

Business Interruption Insurance

If a natural disaster struck and damaged your premises, you might be forced to close to allow for repairs. Business interruption insurance covers lost income, pay for ongoing business expenses, finance a relocation and more.

Equipment Breakdown Insurance

If your business depends on a piece of equipment to continue serving customers or clients, equipment breakdown insurance is essential. It pays for repairs or replacements of vital pieces of equipment, from refrigerators at restaurants to factory equipment used by manufacturers. Do note that equipment breakdown insurance will usually not cover breakdowns related to deferred maintenance or irresponsibility.

Owners and Key Personnel

If you lose your ability to work due to an injury, an illness, or some other circumstance, you may find yourself unable to run your business. Similarly, you may find it difficult to continue running your business if something happens to a key executive or employee. Insurance policies in this category exist to help provide stability for your business and/or your family in such cases. Examples might include life insurance, disability insurance, partnership insurance, key person insurance or critical illness insurance.

Industry-Specific Insurance

There are types of business insurance that are designed specifically for the needs and operations of certain industries. At Guild Insurance Brokers & HMS Insurance Agencies, we offer policy options for farmers, oil & gas companies, hospitality industry businesses, railroads, manufacturing operations and more. Such coverage is uniquely fine-tuned to these industries and don’t apply to businesses operating outside of these niches. For instance, our hospitality insurance coverage provides liability coverage for risks like food-borne illnesses or injuries/property damage caused by intoxicated customers. The average business won’t have these risks, but restaurants, bars, and hotels often do.

At Guild Insurance Brokers & HMS Insurance Agencies, we can help you design an effective small business insurance package for your venture. Whether you’re an entrepreneur in the early stages of running a business or an established business owner. We can help you determine what types of insurance are necessary and how much coverage you need in each area. To get started, give us a call at 1-866-277-4949 or click the Tell Me More button.