When something goes wrong, insurance can help keep your small business running and even protect you from losing your personal assets. While you may hear “business insurance” and think that’s a policy you need to buy, there are actually many different types of business insurance, and what you need depends on what you do. Keep reading to learn more about how to figure out what to buy.
What Do You Have to Lose?
The first thing you need to do is figure out what you need to protect. This can include several things.
- Lost profits if your business has to temporarily close.
- Loss of business savings to pay for a mishap.
- Having to sell important business assets if you don’t have enough cash on hand.
- Having to liquidate your business if you still can’t raise enough money.
- Losing your house or other personal assets if your business isn’t able to pay a claim against it.
What Can Cause Losses?
You should also consider the types of losses you might face. These will vary by business, and some businesses will have a higher risk than others.
- Injuring a customer while working.
- Injuring a passerby while working.
- Getting into an accident in your work truck.
- Negligence during your work causing a fire.
- A visitor in your office or store slipping and falling.
- Causing a customer’s business to temporarily shut down or otherwise lose money.
- Losing profits while your own business is temporarily closed.
What Are Your Insurance Options?
There are several different types of insurance policies you can use to cover your risks.
- Business Owner’s Policy: A business owner’s policy isn’t a specific type of coverage. It’s a package of the most common types of insurance coverage. Most insurance companies have a different package for each type of business, so this option may be enough for your basic needs.
- Commercial General Liability: This coverage covers property damage and personal injuries to others. Almost every business needs this coverage because it covers most types of lawsuits.
- Professional Liability Insurance: If you engage in specialized work, you may need professional liability insurance on top of your general liability. Commercial general liability may exclude errors in your professional judgment or negligence in certain high-skilled work. Professional liability insurance closes the gap.
- Commercial Auto Insurance: Driving, whether down the highway or around a job site, needs its own insurance coverage. Commercial auto insurance has similar coverages to personal car insurance, but rates will vary based on how much and what type of driving you do.
- Business Interruption Insurance: If a fire, theft, or other covered mishap force you to temporarily close or otherwise lose sales, business interruption insurance can kick in. It may cover any additional expenses you incur to keep operating, or it may directly pay for your lost profits.
- Commercial Umbrella Coverage: An umbrella policy adds to your existing insurance coverages. For example, you might have $500,000 in commercial auto liability coverage and buy an additional $1 million in umbrella coverage in case you’re sued for a larger amount than your auto policy covers. This generally gives you a cheaper way to increase your liability coverage without increasing each separate policy individually.
Talk to Your Insurance Agent
Your insurance agent can help you figure out which coverages you need and if any other special coverages might be useful for your business. To learn more or get a quote, talk to Long & Company , today.
