The Essential Insurance Policies Every Small Business Needs

June 2021
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Business owners know that unexpected costs and losses are all too common. If you're not cautious, an accident, natural disaster, or lawsuit could easily run you out of business. Because of this, it's important to assess your risks and insurance coverage regularly to ensure that you're adequately covered.

While the coverage you need will vary depending on your business model and industry, there are several key small business insurance policies that the majority companies will need. Learn more.

The 8 Insurance Policies Your Small Business Needs

Business Owner's Policy

A business owner's policy is an insurance package that combines several policy types. Because bundling your policies in this way often comes with cost savings, this policy is often an excellent option for many small business owners.
A business owner's policy (BOP) often bundles general liability insurance and commercial property insurance, and may include other policies as well.

Workers Compensation

In all U.S. states except Texas, an employer with more than a certain number of employees is required by law to carry workers compensation insurance. This number varies by state but is typically between three and five employees.

Workers comp insurance is designed to cover medical care and may replace a portion of lost wages for an employee injured in the course of employment.

General Liability

A lawsuit can be devastating for a small business, making general liability insurance a necessity. General liability insurance is meant to help protect against damage to third parties, which may include bodily injury, property damage, libel, and other concerns.

Professional Liability

Professional liability insurance is used to protect your business from incidents such as malpractice, errors, and negligence. This is often a great option for companies that provide services to customers or clients, such as photographers, financial advisors, website designers, and others.

Commercial Property

Commercial property insurance helps protect your business from loss and damage to your physical place of business, whether you own or rent the building. Covered events may include fire, smoke, wind and hail, vandalism, and other concerns. This coverage goes beyond protecting your company's physical building to include personal property such as office furnishings, inventory, etc.

Cyber Liability

Cyber issues such as a data breach or malicious software attack can be extremely costly for a small business. Cyber liability insurance is meant to help protect an organization in the event that customer, client, or other data is exposed in a data breach.

Business Interruption

Business interruption insurance, sometimes called business income insurance, generally protects your company by replacing income lost if a business is halted due to a direct physical loss or damage. These policies typically cover incidents such as fire, or a natural disaster.

Commercial Auto

Commercial auto insurance is essential if you have a vehicle used for your business. Coverage typically includes costs to third parties due to bodily injury or property damage.

Evaluating your small business insurance coverage is crucial to building a strong, successful business. The best way to make sure that your business is protected should a disaster strike is to reach out to your insurance agent. Get a quote now.