Do I Need Business Insurance?
Did you know that 75% of United States business owners are underinsured? If a loss is incurred and that business is underinsured, it can stop them from ever opening their doors again.
The average business cost, per year, is $1,281. But for small businesses, that number can be significantly less. That being said, the average claim cost is upwards of $15,000. So it makes sense to acquire insurance for your business, even if it's small.
If you're asking yourself, "Do I need business insurance?" The answer is yes. You do need it because the last thing you want is for a claim to stop you from keeping your business running.
How should you go about getting insurance? And what kind of insurance do you need? Keep reading for a detailed guide into small business insurance.
What Is It?
There are many different types of business insurance but all different types do the same thing in that they all protect the business and its owner.
Small business insurance can help your business survive. And whether or not you have it can, unfortunately, make or break your business. Having small business insurance will help you cover costs when it comes to liability or damage claims.
Typically, you don't need to pay premiums on things you don't need as most insurance companies will allow you to tailor your business insurance to fit your specific needs.
What Are the Main Types of Business Insurance?
There are many ways in which you can insure your small business. If you have employees, you should probably invest in Worker's Compensation.
Workers' Compensation helps to provide benefits to employees who become injured or ill on the job. If the worst happens and an employee becomes seriously injured or passes away on the job, workers' comp will pay benefits to that individual and/or their family.
Business Income Insurance helps replace your lost income should you have to shut your business down as a result of a covered incident. For example, if you suffer a power outage and have to shut down, that business income insurance will help cover your lost income.
General Liability Insurance helps protect your business against claims that are made against it. Bodily injury, personal damages, advertising damages, and property damage claims can all be covered by costs that your insurance will help you to cover.
Commercial Property Insurance helps protect against lost, stolen, or damaged property like tools, furniture, equipment, and inventory.
Professional Liability Insurance helps protect against claims that are made as a result of an error in your business. For example, if you accidentally damage a wedding dress that you're tailoring for a bride and something happens, professional liability insurance can help you pay those costs.
What Are Some Other Types to Consider?
In addition to the aforementioned times of insurance, there are other types of small business insurance, such as:
- Commercial auto insurance
- Directors and officers insurance
- Data breach coverage
- Business owner's policy
If you're asking yourself, "What kind of insurance do I need?", take a look at the many different types and see if and how they might apply to you. You can also talk to an insurance professional to help you determine what will work best for your business.
How Much Does It Cost?
How much your small business insurance will set you back has a lot to do with a few different factors.
The risk level of your business has a lot to do with it. For example, if you're a bar owner, the risk for injury is much greater than someone who owns a souvenir shop because there is alcohol involved and the hours are greater.
That being said, a jewelry store owner would have a higher cost in protecting assets.
The condition of your location also comes into play. If your building is old or outdated, this may warrant a higher insurance premium, all depending on what your business is.
There are things you can do, like packaging some of your policies into a Small Business Owner's Policy. In doing so, you can tailor your policy and add on additional insurance for less than if you bought them each individually.
What If You Don't Get Small Business Insurance?
If you don't get insurance for your small business, you run the risk of losing your business at any time.
Even though when you're running a small business, it's important to cut costs when you can, insurance is not a cost that should be overlooked.
Without it, you could be left owing tens of thousands of dollars for something that is no fault of your own. The low monthly cost that will give you peace of mind and financial security is much more important than anything else.
With workers' compensation insurance, you can, at the very least, protect your employees.
Would you also like help with acquiring licenses and permits for your business? Check out how to do so here.
You Might Still Be Asking, "Do I Need Business Insurance?"
You might be wondering what the chances are of a claim being pressed against you or your business. You might think that because you think the chance is slim, you can skip it for now.
But if you're still wondering, "Do I need business insurance?," the answer is an absolute YES. Even for that small chance, knowing that you have a plan should the worst occur, will give you the ultimate peace of mind.
Plus, you're protecting your business against being shut down or you having to fork over thousands of dollars of your own money.
Want to know about hiring independent contractors for your business? Click here for the pros and cons and how to go about it.
