Protect your business and your employees from all possibilities. Learn why small business insurance is important, and what types of insurance your business may need.
As a business owner, you’re responsible for your employees, customers, and every other aspect of the business. Some of your financial responsibility comes in the form of good accounting practices and managing cash flow so your business can continue to operate. Other aspects are harder to predict, but just as important.
Small business insurance is critical for protecting the health and well-being of everyone who interacts with your business, as well as the business itself. For growing businesses, it can be difficult to know which types of small business insurance you should consider.
Why You May Need Insurance for Your SMB
There are many benefits to insurance beyond simply protecting your small business from liability. If there is an accident at your business, a mishap with your products, or even a car accident with one of your company vehicles, it could significantly harm the financial health of your business.
Insurance can also help you protect your equipment and office in the event of an accident or fire. It can also provide assistance to employees. In certain situations, insurance may be required by law to conduct certain types of business or to enter specific contracts. It’s important to take stock of what you need to protect and prioritize the main reasons you are looking for small business insurance before beginning your search.
Types of Small Business Insurance
Depending on your particular business, you may need several types of insurance coverage. Here are some of the most common that may apply to you.
General Business Liability Insurance
Liability insurance is one of the most common and important types of coverage that all businesses may need. This insurance protects your business from costs associated with legal defense and damages if your employees, products, services, or property are alleged to have caused injury or damage to another party.
Workers Compensation Insurance
No matter the number of employees or the nature of their work, workers compensation could be important for all businesses. This insurance covers costs and benefits if an employee is injured or dies as a result of working at your business. While this is vitally important at riskier worksites, even an office setting can result in small accidents or chronic issues that could result in an expensive claim for your business.
Property and Vehicle Insurance
If your business owns or rents property or equipment, insuring it may be a high priority. This type of insurance will safeguard you against any accidents or damage to your valuable property. This is especially important for businesses that rely on expensive machinery or equipment. This type of insurance should also provide liability coverage if your vehicles or equipment cause bodily harm or property damage to another person.
Errors and Omissions Insurance
Businesses that offer services should look into errors and omissions insurance. This type of coverage provides defense and damages if you or your employees are alleged to have improperly rendered professional services. Lawyers, consultants, contractors, and other professionals could all be liable if the services they offer are alleged to have caused harm or damage.
Data Breach Insurance
While many small businesses don’t feel they need to be concerned with data breaches, the fact is that small businesses may be at the greatest risk. According to Accenture, 60% of SMBs that experience a data breach go out of business within 6 months. If your business works with potentially valuable or sensitive information — particularly customer data — data breach insurance can help safeguard your business against the financial ramifications that may come if you’re the victim of a breach.
While most of the above types of coverage will help protect your business from liability, health insurance is an opportunity to provide your employees with an additional benefit. Providing health insurance to your workforce may help attract more desirable employees. It may also improve retention and improve the overall well-being of your office.
Cost Management and Accounting
Budgeting for insurance and understanding where your greatest liabilities lie comes from a strong understanding of your business assets and cash flow. An all-in-one accounting, payroll, cash flow, and payments software like FINSYNC can help you get a handle on your business finances and keep track of everything that needs protecting. With valuable reports on a single dashboard, you can easily paint a complete picture of your business as you look for guidance on small business insurance.
While this overview of different types of insurance for your business is a good starting point, it’s not a substitute for the advice of an insurance agent or legal professional. There are many more types of insurance coverage that might benefit your business, and many other ways you may be liable without realizing it. The best approach you can take as a small business owner is to speak with a professional about which coverage options may be right for you.