For most of us, small business owners, the last thing we want to think about is being sued and being unable to carry on trading because of it. While having small business insurance may not stop us from being sued, it will mean that there is more of a chance that we can afford to carry on trading because the insurance we’ve paid will cover the claim.
What insurance do I need as a small business?
There are broadly four types of insurance for small businesses; General Liability Insurance, Professional Liability (Errors & Omissions), Commercial Auto, and Workers Compensation.
Very briefly, each insurance covers the following:
- General Liability – General liability covers any physical injury or damage to a person or property stemming from accidents or negligence. Some general liability insurance covers professional claims for things such as Copywrite claims.
- Professional Liability – This type of insurance covers you and your business if you are either unable to complete the job for which you’ve been hired, or your client is unhappy about the job that was done. Professional Liability Insurance will usually cover the cost for the work to be completed, redone, or rectified.
- Commercial Auto – f your vehicle is used for your business, this is usually a requirement by law. Commercial Auto Insurance covers any accidents that you may cause with your commercial vehicle. It also covers accidents that are caused by your commercial vehicle, including accidents and damage to property or people.
- Workers Compensation Insurance – This type of insurance is also a legal requirement in many states (but not all) for businesses with any number of employees. Workers Compensation Insurance covers you and your employees at work. Should they have an accident, the insurance will cover their medical bills and their salary while they recover.
Is it illegal not to have business insurance?
It very much depends on the type of insurance. In some states, it’s a legal requirement to have Workers Compensation Insurance, but in other states, it’s not. For the most part, there aren’t many instances where it is a legal requirement to have business insurance. However, it’s certainly worth it in the long run and for the longevity of your business.
How much is small business insurance?
Small business insurance can range in prices, anywhere from $30 a month right up to hundreds or thousands of dollars, depending on your level of cover.
It may be tempting to go for the lowest option, with insurance. However, it is always worth reading the small print. Or you can get a professional broker to ensure you have the right level of cover. No one wants to be in a situation where they need to cash in their insurance cover only to find out that the premiums they have been paying for don’t cover the issues they’re now facing.
Business insurance is a topic most business owners don’t like to think about it. Paying a premium every month for ‘nothing’ can seem like a waste of money when we don’t see the return. Still, if the worst were to happen, and the business was on the brink of bankruptcy due to a lawsuit, business insurance is absolutely priceless.
Featured Photo by Tim Mossholder on Unsplash