Sorting out insurance is not the most exciting task when launching a company, but it is an important one. Every company needs insurance coverage to protect against the costs related to damage, losses, and liability claims. Knowing what kind of insurance you need can be difficult, particularly when there are multiple options available. With this in mind, here is an essential guide to small business insurance.
What is small business insurance?
Small business insurance is designed to help companies and their employees with accident and financial loss recovery. Having insurance policies in place is fundamental to effective risk management. Every business owner should be aware of the different insurance policies available and take out cover to protect their company. Here are some of the main insurance coverages that business owners should be aware of:
- Professional liability insurance – This is also known as errors and omissions insurance and is in place to protect businesses against claims of negligence or malpractice.
- General liability insurance – This protects small businesses against liability claims brought by third parties — i.e. if someone is injured while visiting your business site.
- Worker’s compensation insurance – This can be used to fund employees’ medical treatment if they are injured during their employment.
- Property insurance – This covers damage or loss of property or equipment used by the business — i.e. if there is a fire or break-in.
- Commercial auto insurance – This covers vehicles that business owners and employees use for work purposes.
Business owners can pay for insurance policies individually or arrange an insurance package that covers multiple risks. For instance, small business insurance by Next Insurance can be tailored to suit your exact business needs and requirements. Having a tailored insurance package can be far more convenient and affordable than arranging your company insurance policies separately.
Why do I need business insurance?
Without insurance coverage, businesses are at risk of significant unexpected costs as a result of property damage, loss, or personal injury. For example, if a member of staff or visitor has an accident in your commercial property, then you may be liable to pay compensation for any injuries and subsequent losses. Having insurance coverage is a vital part of responsible risk management. Taking out insurance will give you peace of mind knowing that your company’s financial position will not be affected if you encounter unexpected losses or accidents.
What is the cost of insurance?
The cost of business insurance varies greatly depending on several factors. Firstly, the size of your company will influence how much you pay. A single self-employed person will pay a lot less than a company with a large team of employees, for example. Your business operations will also play a role in the cost of your insurance coverage. Businesses that are perceived as being at higher risk, i.e. production companies operating large machinery, will be charged more by insurance providers than those who are classed as low risk.
Founder & Editor-in-Chief of Pinstripe Magazine. Creative thinker and menswear designer who has been writing articles dedicated to men’s fashion, lifestyle, luxury items, home design, gear, grooming and gadgets since 1998. For info on PinstripeMag, any editorial needs or to contact me please email at marv@pinstripemag.com.
