Best Insurance For Small Businesses: Your Complete Guide

Best Insurance for small businesses

Best Insurance for small businessesHave you recently opened up a small business? Not to alarm you, but when you have a business there are many liabilities that could potentially cause you to lose money. That’s why you should consider looking for the best insurance for small businesses to cover these potential risks.

Since you have a small company, you may not have a lot of money to spend on insurance. So that’s why there are insurance policies that provide affordable coverage for startup companies or small-scale businesses.

But not all insurance companies are the same. So how do you choose the right one for your business? In today’s article, you can find all the information you need on the various types of insurance for small companies. Keep reading to find out how to find the right insurance plan for your requirements.

What Business Insurance Is And Why You Need It

Accidents can easily happen in the workplace. Sometimes employees injure themselves on-site, or storms can damage your property. Insurance is designed to protect you from financial loss in the event of a crisis.

There are several types of business insurance policies that are tailored for your specific needs. You can get insurance to cover legal payments, employee compensation claims, or damage to products and property. It’s important to have proper business insurance for financial and legal protection.

For example, if a client tries to sue your business or you experience monetary theft in the workplace, the correct insurance policy can help you recover from these financial losses.

6 Major Types Of Small Business Insurance Plans

There are six major types of small business insurance policies for you to pick from that will provide coverage for different liabilities. In this section, I will provide more information about what the different types of insurances will cover according to their type.

Errors & Omissions And Personal Liability Insurance

Errors and omissions, or personal liability insurance, covers you for financial loss during a lawsuit or claims by consumers and clients. This type of insurance policy will assist with payments for settlements.

For personal liability policies, the insurance will cover you for claims of negligence or poor advice given to clients or customers. If you work in an industry that provides physical care or healthcare advice, you’ll need this type of insurance policy.

If you’re in the following industries, you’ll need errors and omissions, or personal liability, coverage:

  • Real estate
  • Accounting
  • Insurance agency
  • Financial advising
  • Architecture

General Liability

General liability insurance policies protect small businesses when they get sued by third parties. This type of insurance will help cover you for legal costs or settlements that are made. Lawsuits can occur if, for example, clients or customers feel that your company has presented false advertising. The policy will also cover you for claims of bodily harm that occurs on your business property or for injury caused to a customer from the use of a product you sell.

You may also want to invest in general liability insurance for non-monetary damages and compensatory damages.

Small Business Health Insurance

If you have employees working at your small-scale company, you may want to provide health insurance. This policy provides medical benefits for all your employees, which they can use if they fall ill or get injured.

Property Insurance

If your business operates in an office building, you’ll need property insurance. This type of policy covers equipment such as computers, cameras, fax machines, and more. Additionally, this policy will also cover any damages to your building in the event of a flood, fire, or vandalism.

Worker Compensation

Worker compensation insurance helps employees pay for their medical bills in case they get injured on your property. It ensures that you don’t have to take money out of the business to pay for employee medical costs. This type of policy is ideal for construction companies, among others.

BOP – A Business Owner’s Policy

A business owner’s policy is comprehensive coverage that will assist with any type of liability you may experience. It may provide a complete package that will cover property damage, lawsuits, compensation, and health insurance.

What Type Of Insurance Do You Need For Your Small Business?

Most small business owners opt for general liability, property, and employee compensation insurance. Depending on what industry you’re in, there are other types of insurance that will cover you according to your specific requirements. If you have more than 50 employees, then you may want to consider getting healthcare insurance too. These insurance policies can help protect your small business from unexpected financial loss.

Other Types Of Liability Insurance For Small Businesses

Insurance isn’t simply there to cover you for employee compensation, lawsuits, or property damage. There are insurance policies that help protect you from cyber attacks and data breaches. If most of your work is done on digital devices, you’ll need insurance in the event of data theft or ransomware.

Cyber liability insurance is crucial if you’re dealing with customer information such as banking details, medical records, and credit card information. According to Hanover, 18% of small businesses have experienced data breaches in the past five years. Don’t become part of the statistics. Ensure you have an excellent service provider that will provide quality cyber liability insurance for your small business.

Another type of insurance policy is product liability insurance. This type of policy is ideal for wholesalers, manufacturers, shop owners, and small merchants. The policy will cover your business if a product has caused harm to employees during transportation. Additionally, it will provide coverage if a customer has experienced harm by using one of your products.

With product liability insurance your small business will be protected from legal claims. Product liability claims will cost your business the most. To prevent your small business from closing due to expensive lawsuits or damage to goods, get an extensive product liability policy to protect you.

Frequently Asked Questions (FAQs)

What Is The Best Insurance Company For Small Businesses?

Currently, State Farm is known as the best insurance company for small businesses because the company offers multiple coverages. State Farm has a nationwide network of agents, and they offer over 100 products including banking and commercial insurance.

You’ll appreciate that State Farm offers insurance in every state, and the company offers policies according to each stage of your small business growth. This insurance service provider offers policies for specific industries such as retailers and contractors.

Additionally, State Farm offers discounts to policyholders that combine their coverages into a package.

What Is The Cheapest Small Business Insurance?

Hiscox offers the most affordable insurance policies for small business owners who have fewer than five employees. The company offers its services in all US states, and they have policies for micro business needs.

The Hiscox insurance company offers professional liability, commercial general liability, and business owner’s policies. You can get a limited business coverage of up to $2 million, and higher limits are available if you need them. For $22.50 a month, you can get comprehensive coverage no matter what industry you’re in.

Who Offers Small Business Insurance?

There are many insurance companies that offer policies for small businesses such as The Hartford, Travelers, Liberty Mutual, and Progressive. All of these service providers offer different types of coverages at various monthly costs. All you have to do is pick an insurance company that will provide the policy you want for your small business.

How Much Is Small Business Insurance Per Month?

The cost of small business insurance can be between $300 to $400 per year, but this will depend on the industry you’re in and the size of your business. If you’re in an industry that has higher liabilities and employee injury risks, you may pay more for your policy.

Why Do I Need Insurance For My Small Business?

Any business, whether small or big, will need proper insurance. However, a comprehensive insurance policy is especially important for small businesses because small companies don’t have large pools of money.

You want to ensure that your company is protected against large financial losses that could cause your company to shut down. Most small business owners pick general liability insurance because it’s affordable and protects them from more than one type of liability.

Final Thoughts

When you open up a business, no matter how small it may be, you should shop around for the best insurance company to protect you from any liabilities. If you’re a business owner, you must always be one step ahead because unforeseen circumstances can happen, such as property damage from a storm or cyber hacks.

As a business owner, have you ever experienced financial loss due to damaged property, an employee compensation claim, or lawsuit? How did you handle the situation, and did you have insurance to assist you? We would love to read your thoughts on small business insurance. So leave us a comment below if you’re a small business owner and would like to provide advice to other entrepreneurs.