Business owners have no shortage of things to think about. Marketing strategies. Cash flow. Employee recruitment, training, and retention.
It’s a ton of work that can all be undone in an instant without the right coverage to protect it. Here’s how you should be thinking about it.
What Is Business Insurance?
Business insurance will protect your businesses and the parties it works with from financial risk. It can provide you with legal support if faced with a compensation claim, and it can protect you from financial losses, such as when your property is damaged.
Business insurance is also a legal requirement in most states, so while you don’t need every type of insurance, you are expected by law to have the bare minimum.
What Types Of Business Insurance Do I Need?
We’ve covered the appropriate business insurance portfolio before. And while the specific insurance needs vary by business, at the minimum, you should certainly consider (or may be legally required to have) the following:
- Worker’s Compensation: This is required in most states, and will cover your employees for any on-the-job injuries or illnesses incurred at work.
- Property Insurance: This is essential if you own the building where you house your business. In the event of a fire or other type of damage to your building, you will be covered for any losses.
- Liability Coverage: You’re open to lawsuits as a business owner, from both customers and employees, so no matter what type of business you run, you do need to protect your business with this type of insurance.
- Do you need Worker’s Comp if You’re Self-Employed?
- What is General Liability Insurance? A Primer for Small Business
- How to Choose the Right Commercial Auto Insurance
Depending on the type of business you run, you might also need the following types of insurance.
- Commercial Auto Insurance: You should consider this if you use any type of vehicle within your business.
- Directors And Officers Insurance: This covers the costs that may be incurred if a lawsuit is carried out against a director or office of your company.
- Data Breach Insurance: If you store sensitive information about your clients or customers on your servers, this will protect your financial interests in the event of a data breach.
- Professional Indemnity Insurance: If you give advice or offer services to other businesses, this will cover you if you make a mistake in your work and your client sues you.
- Not sure what you need? Take our free business coverage quiz to find out!
What Factors Should I Consider?
Some types of insurance are required by law and depend upon a range of factors. These factors will also affect the cost of your insurance premiums.
Some of these factors include:
- The type of business you own
- The number of employees within your business
- Salary and yearly income
- The types of goods and services you offer
- The risks associated with your business
Using some of the examples above, you can expect to pay more on your insurance premium if:
- Your business type is one that is seen as hazardous. The more risks associated with your business, the more you can expect to pay. Construction businesses are prime examples because there are a number of dangers associated within that sector.
- You hire more than one employee. The more people you hire, the more you will be expected to pay, as more people equate to greater risks and potential liabilities.
Despite the costs involved, it is important to make sure that you are adequately covered. You will only incur larger costs later if you don’t have the right coverage, so speak to one of our agents to find out more.
What won’t be covered?
No one policy protects against all risks, so you need to make sure you have the exact insurance type you need for your type of business.
There will be times when you will need to pay for extra cover, for those things that won’t be covered a standard policy. If you want your business insurance to cover flood damage, for example, you will need a separate flood insurance policy. You might also need to buy a commercial umbrella liability policy if you want to cover yourself for lawsuits that might exceed $1 million in damages.
Find a Good Insurance Agent
We’re not going to sugarcoat it – getting the right business insurance can be complicated and is difficult to do on your own. A great insurance agent can sit down with you and discuss any coverage gaps that might exist for your type of business.
When choosing a good commercial insurance agent, make sure you consider these factors:
- Local. Having a local insurance agent is helpful because they will be more likely to pick up the phone, be available when there’s an emergency, and know your business more intimately than an impersonal call center.
- Knowledgeable about commercial insurance. This goes without saying, but many insurance agencies treat commercial insurance as an afterthought – they focus on personal insurance. They aren’t the same thing and the risk to business owners can be significant.
- Available. When it hits the fan, you need to know you can get ahold of your insurance agent.
Finding the right type of business insurance can be confusing, but we are here to help. If you are in mid-Michigan, the Holt & Dimondale Insurance Agency is a top commercial insurance agency. Take our business insurance coverage quiz to figure out what your business might need, given it’s specifics.
Still not sure? Reach out to us for expert advice and get the information you need to adequately cover your business.