Small Business Insurance Options – Forbes Advisor


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Starting a new business is an exciting time, and you’ll want to choose the best types of small business insurance policies to protect your business from the potential costs of claims, damages, and lawsuits. Here is an overview of important insurance policies for small businesses.

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Liability insurance for companies

General liability insurance protects a small business against claims for property damage and personal injury. As a small business owner, you can be legally responsible if someone’s property is damaged while visiting your business, business, or store. And if your business is responsible for someone’s injuries (excluding employee injuries), liability insurance would also cover their medical bills and lost wages.

Other claims handled by liability insurance include reputational damage, publicity damage, and copyright infringement.

With the help of a business liability insurance policy, your small business will be able to maintain financial stability whether you are sued by a client or another business. A general liability policy also pays your legal fees, as well as settlements and judgments.

Financial lenders, landlords, licensing boards, and corporate clients often need general liability insurance before doing business. So there are plenty of reasons to put commercial liability insurance at the top of your insurance to-do list. A liability insurance certificate will show that you are properly insured.

A liability insurance policy costs an average of $ 42 per month, according to Insureon.

Commercial Property Insurance

A commercial property insurance policy protects the physical location of your small business as well as your business equipment, computers and office furniture. Both owned and leased professional equipment is covered by this policy.

It takes a lot to grow a small business, and there are a lot of things covered by a commercial property insurance policy. Tools, inventory, supplies, security papers and business records are all covered. Commercial property insurance also covers outdoor facilities such as signs and fences.

A commercial property insurance policy generally applies to any loss suffered by your small business due to hazards such as lightning, wind, hail, and fire. Business property insurance also covers theft and vandalism.

A commercial property insurance policy has a median cost of $ 63 per month, according to Insureon.

Business interruption insurance

A business interruption insurance policy replaces a small business’s lost income if you need to temporarily close due to a loss covered by the policy, such as a lightning strike or fire. Other risks covered by business interruption insurance include theft, wind and falling objects.

If any of these issues hit your small business, business interruption insurance pays for money lost due to damaged merchandise, lost income, and additional expenses such as temporarily relocating the business. to a new location.

This is also called business income insurance.

Business interruption insurance costs between $ 40 and $ 130 per month, according to Insureon.

A policy of business owners

A business owners insurance policy (BOP) is a combination of general liability insurance, business property insurance and business interruption insurance. It’s an affordable way to buy insurance for small businesses. Buying the policies separately will mean higher prices.

How affordable is a BOP? It costs an average of $ 53 per month, according to Insureon.

According to the Insurance Information Institute, companies with 100 or fewer employees and revenues of around $ 5 million are good candidates for a BOP.

Commercial auto insurance

Commercial auto insurance is necessary for the cars, trucks, and vans used for your small business.
A personal automobile insurance policy generally excludes any commercial use of a vehicle. This is why it is so important to purchase a commercial auto insurance policy if you own a company car, truck, or van that you use for business purposes.

If you do not purchase professional auto insurance for work vehicles, any claim you make may be denied. You will end up paying for any accidents and other damage yourself which could be very expensive.

Commercial auto insurance costs an average of $ 142 per month, according to Insureon.

Rented and Unowned Automobile Liability Insurance provides liability coverage if employees rent or use their personal cars for business purposes.

Since any professional driving that you drive will not be covered by a personal insurance policy, it is essential that you purchase hired auto liability insurance if you are renting a car for work or driving your own car for business purposes. This will give you the insurance coverage you need and save you from a hefty insurance claim if you are at fault for an accident while driving on business.

Cyber ​​liability insurance

A liability insurance policy helps cover the costs of cyber attacks and data breaches. Suppose private customer information is leaked to your company database. If the customer files a claim against your business, liability insurance will help pay the costs. Cyber ​​liability insurance will also help pay for things like notifying customers affected by a data breach and giving them free credit monitoring.

The median cost of liability insurance is $ 140 per month for small businesses, according to Insureon.

Errors and omissions insurance

If your small business provides professional service or offers advice to clients, this is a good candidate for errors and omissions insurance.

Errors and Omissions (E&O) insurance pays the costs resulting from errors you make in your job. This insurance is also called professional liability insurance.

Errors and Omissions insurance will pay to customers who make a claim against your small business. These types of errors include misrepresentation, breach of good faith and fair dealing, negligence, and false or inaccurate advice.

It also pays legal defense costs, judgments and settlements.

Without E&O insurance, you will have to reimburse clients out of pocket and pay a lawyer.

What types of small businesses would benefit from errors and omissions insurance coverage? Here are some examples:

• Accountants

• Advertising agencies

• Graphic designers

• Interior decorators

• Management and business advice

• Real estate agents

• Tax preparers

• Technology professionals

• Travel agents

The median cost of errors and omissions insurance is $ 59 per month, according to Insureon.

Coverage of technological errors and omissions

If you work in technology, you may be able to purchase an errors and omissions policy specifically for your type of job. Technology errors and omissions insurance pays for legal and other fees for claims made by customers against a small technology company.

The types of small business tech professionals who could benefit include:

• IT Consultants

• Internet service providers

• IT subcontractors

• Software developers

• Website Developers

The median cost of technological errors and omissions insurance is about $ 60 per month, according to Insureon.

Commercial umbrella insurance

Commercial umbrella insurance offers an additional layer of protection over other liability insurance policies for your small business. Once you reach your limit of liability on an underlying insurance policy, commercial umbrella insurance will provide additional liability protection.

You can use a commercial umbrella policy with a general liability policy and a commercial automobile policy.

Let’s say your business is sued for $ 1.2 million, but you only have $ 500,000 in a business liability insurance policy. Commercial umbrella insurance would cover the $ 700,000 shortfall.

The amount of coverage you choose and the risk level of your business determine how much you will pay for an umbrella policy.

Commercial umbrella insurance costs about $ 40 per month for every $ 1 million in additional insurance coverage, according to Insureon.

Workers’ compensation insurance

If you have even one employee for your small business, you will need to purchase workers’ compensation insurance. Workers’ compensation pays for work-related illnesses and injuries of your employees and this is required in most states. This insurance covers medical care, lost wages and disability benefits for employees.

Small business customers pay a median premium of $ 47 per month for workers’ compensation insurance, according to Insureon.

Other types of insurance for small businesses

Here are some additional types of insurance you may need for a small business.

Insurance of directors and officers (D&O). This type of liability insurance policy covers decisions made by directors, officers and members of the board of directors of a company. If they are sued, D&O Insurance may pay their legal fees. For example, directors and officers could be sued by employees, vendors, investors or customers for alleged wrongdoing in the management of the business.

Domestic maritime insurance. Domestic marine insurance covers products, materials and equipment that are transported overland by truck or train. He will pay for goods that have been damaged, lost or stolen.

Product liability insurance. This type of liability insurance covers claims and lawsuits that a company’s products have caused injury or property damage. If you are making a product, this is a good insurance guarantee to have.

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Compare free quotes from the best insurers on SimplyBusiness. Get a policy in under 10 minutes.


About Yvonne Lozier

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