Insurance coverage your small business needs

Insurance coverage your small business needs

As a business owner, you will be faced with many tasks that won’t always be fun to complete. One of these is budgeting for commercial insurance for your company and your employees.

There are expert ways to deal with these tasks. For instance, Inc magazine has released a guide to help develop a budget for coverage, though you may need to alter plans depending on the industry you are in and limits on coverage that may come with a basic policy.

While there are many options when it comes to buying small business insurance, knowing what you absolutely need and what you can exclude may help your budget.

General liability insurance will provide coverage for legal situations that may arise should someone file a lawsuit or if someone makes a claim of negligence. Having business liability insurance extends financial protection in the event that someone gets injured or incurs property damage, as it can cover medical expenses and legal processes. Should you run a business that is considered risky, you may need to inquire about limitations for liability coverage, but these can be increased if needed.

Another necessary business insurance policy to invest in is property and business interruption. This coverage protects a company’s structure, assets, equipment and inventory, should damages occur and leave the doors closed on continuing business. While this coverage will come in handy if your company is affected by a natural disaster or extreme vandalism, Inc suggests being mindful of the amount of coverage that is purchased, as many small business owners may purchase more coverage than needed. And though this may seem like a general type of business insurance, plans can vary greatly, so reading the terms and conditions thoroughly can ensure that you are covered should you need to file a claim.

If you have employees, you will need to purchase workers’ compensation insurance, unless you are a small business owner in Texas, as Inc reports this is the only state that this coverage isn’t mandatory for business owners. Very small business may not be required to carry this protection, but offering this to your employees may provide them with peace of mind and give you financial protection should one of your workers be injured on the job. States regulate the amount of coverage that must be purchased, and this insurance, unlike others, is purchased through a specific state provider. Having workers’ compensation will also show that you value those who work for you. Details outlined within a policy will include how much insurance needed, what type of employee must have coverage, such as full-time, part-time or salaried, as well as the rate of payment.

Also, if your employees ever get behind the wheel for work, you will need commercial auto insurance. If your employees aren’t traveling by car to complete their duties, you can skip this type of coverage. You may not need to invest in this policy, though, if you have an adequate business insurance policy, but only if vehicles are used sporadically.

Premiums for business insurance can be considerably different from private insurance policies, but when looking to save money within your budget, coverage may not be the first place to start doing so. After reviewing factors, you can determine if you need to purchase additional coverage outside of a basic business insurance policy, frequently called a BOP.