You’ve got your business all planned out. You know how you’re going to finance it, you’ve started your first marketing campaign, and you began hiring staff members.
All that’s left is the legal paperwork. You’ll need to register your company and buy insurance. Are you asking yourself what small business insurance do I need?
Without basic liability and workers’ compensation coverage, you leave yourself open to being sued.
These are only a few policies that you’ll have to look into. We have a complete list of insurance necessities that will keep your company safe. Check out this guide to learn more about the different types of small business insurance.
Liability Insurance
Someone spilled water on your floor. Before one of your employees can grab wet floor signs and wipe up the liquid, one of your customers slips on it.
The customer is understandably furious. They’re asking for your name and company information. Without liability insurance, they can sue you for damages.
You’ll end up paying money out of your own pocket for the customer’s medical bills. According to professionals at Florida Home Claim, this type of insurance can also cover you if another party sues you for copyright infringement.
Commercial Property Insurance
Commercial property insurance does as the name suggests. It’s insurance for startups that takes care of your physical building and everything inside it.
If a fire breaks out in your building or it’s flooded by a storm, you’ll be able to replace anything that’s destroyed. This includes your equipment, furniture, tools, and inventory.
You’ll be able to get compensation for theft. If someone breaks in and vandalizes your property, your insurance company will take care of that, as well.
Workers’ Compensation Insurance
We’re going to take the example we gave in our section about liability insurance and flip it around a little. Let’s say that one of your employees gets hurt at work.
They’re carrying boxes across your store and slip over a spill on the floor. They put in a workers’ compensation claim to take care of their damages.
If you don’t have the proper insurance, you’ll have to pay for their medical bills and compensate them for the time that they spend out of work.
This isn’t the only reason why this type of insurance is so important. It’s also illegal not to have it in most states. You can get into serious trouble if you try to opt-out.
Business Income Insurance
A horrible fire broke out in your restaurant. It’s turned into a financial tragedy that you don’t think you’ll ever bounce back from. You’ll have to shut the business down too long to make the money back.
That’s what business income insurance is for. Your insurance company will replace any income that you lost while your doors were closed. You can also get compensation for income lost due to wind damages and theft.
Commercial Auto Insurance
This type of insurance is optional. It’s good to have if your employees drive a company car around. For example, a cleaning business that travels from house to house.
Every time your employees get into the vehicle, there’s a chance that something may go wrong. They could hit a customer’s car when they’re backing out of the driveway.
Commercial auto insurance will take care of the damages if the court rules that the accident was the fault of you or your staff members.
Data Breach Insurance
There’s one thing that will shut your business down faster than anything else. This thing is a data breach. A hacker can get into your computer systems and steal confidential data.
You’ll have to offer credit monitoring services to every single customer and employee whose information was compromised by the breach.
Data breach insurance can take care of this for you as well as let customers know what’s going on, and pay for a law firm to get your business back on track.
Professional Liability Insurance
If you run a business that offers a service, you’ll need professional liability insurance. You’re only human and mistakes happen. This policy will help you pay for those mistakes.
For example, if you’re an accountant who gives a customer bad financial advice, they may sue you for negligence. Professional liability insurance will take care of your legal fees.
Business Owners Policy
We understand that opening all of these policies is more than a little bit expensive when you’re starting out as a new business. Getting a business owner’s policy can help take some of the expense off your shoulders.
It will bundle your commercial property, liability, and business income insurance together. It’s much cheaper than taking out a separate policy for each.
If you don’t qualify for a business owner’s policy or you want to get a price quote on how much it will cost, an insurance adviser can help you out.
What Small Business Insurance Do I Need? Your Complete Guide
Before your business can open, you’ll need to know the answer to “what small business insurance do I need.” Without a policy, you’ll have to pay out of pocket if someone’s hurt on your property.
If a fire breaks out, you’ll have to replace everything on your own. You’ll have to compensate customers if a hacker steals their information or one of your employees crashes into their car while driving a company vehicle.
Any of these situations can be bad enough to cause you to close your doors for good. Don’t let that happen to you. Start looking into policies today and visit our blog for more business finance tips.