Small Business Insurance is unquestionably one of the most critical things you need to protect your assets if you are a small business owner. But, specifically, what kind of insurance do you need?
When it comes to small business insurance, there is no such thing as a “one-size-fits-all” solution, just as there are no two firms that are alike. Your insurance needs will vary depending on a number of criteria, including the industry you work in, the trade you do, and the type of business you manage. It will also be determined by the size and location of your company, as well as your risk appetite.
A trader, unlike a real estate agent, a coffee shop, or an engineering firm, will be confronted different risks and hazards. A mobile or home-based hairdresser’s needs will differ from those of a salon owner with a shop
However, one thing is certain: getting the right insurance is an important aspect of managing the risks that come with running a business. And, let’s face it, regardless of their size or industry, all businesses face some level of risk on a regular basis.
It’s also worth noting that some types of insurance are necessary for many types of businesses, whether it’s due to a legal requirement, a requirement as a member of a professional board or association, or a contractual requirement with a landlord or a client.
Fortunately, there are many policy options available these days, and small business insurance policies can be personalized to meet your specific business needs.
7 Types Of Insurance For Small Businesses
What insurance do I need to protect my business? There are different types of insurance for small businesses, it’s a good idea to consider covering your assets, revenue, and liabilities. Here are seven different types of insurance for small businesses to consider.
- Public Liability Insurance
All kinds of business, even home-based businesses should consider purchasing Public Liability Insurance. It protects you and your employees from third-party claims for bodily injury or property damage caused by your products or services. For example, if a customer stumbles on a wet patch of your shop floor and breaks their wrist, or if an employee damages your customer’s furniture while renovating their home, it can provide protection.
Public liability insurance covers not only the expense of compensation, but also the cost of your defense. If you don’t have the right level of coverage, a potential claim might cost you thousands of dollars (or even hundreds of thousands of dollars) which could be enough to put a small business out of business!
- Professional Indemnity Insurance
Professional Indemnity (PI) Insurance is a must-have if your business or profession involves delivering a service or advice. It shields professionals against liability for damages as well as the legal costs of defending themselves against claims originating from an act, omission, or breach of duty while on the job. If there is just financial loss or if the reason of the loss was a violation of professional duty, your Public Liability policy will not cover you, so it’s critical that you understand the difference.
Many professions, including chiropractors, consultants, engineers, architects, real estate agents, and accountants, are covered by professional indemnity insurance. In many professions, having a PI policy is required in order to provide your services to clients.
Each sector has its own set of risks, which can be addressed in an insurance policy tailored to your individual profession.
- Business Insurance
Business insurance is frequently sold as a package that includes a variety of coverage options, the most common of which are Building, Contents, Theft, Glass, and General Property.
It is meant to cover material damage losses caused by unforeseeable occurrences such as fire, storm, theft, and unintentional damage, as well as loss or damage to portable and valued items such as laptops and cell phones. You can also combine business insurance with your public liability insurance.
You’ve put a lot of time and work into building your business, so it’s critical to think about the types of insurance policies you’ll need to safeguard it.
- Business Interruption
Have you ever considered how your business might survive if it came to a halt unexpectedly? How would you survive financially if a fire, storm, or theft forced you to rebuild your business (perhaps from the ground up), or if a minor issue like a burst water pipe forced you to close your doors temporarily?
Your Business Insurance would assist you in restoring your physical assets, but how would you deal if you were no longer earning any revenue, or if your revenue unexpectedly decreased? You can incorporate Business Interruption as part of your Business Insurance; it covers loss of income as well as higher operating expenses as a result of interruption caused by material damage events.
- Management Liability Insurance
Management Liability Insurance safeguards the firm and those in charge of it, such as the Company Director and Senior Managers, against the risks and exposures that come with running a business – your liability for mismanagement. It protects against allegations and acts of misconduct, as well as legal violations, defamation, statutory breach of duty, OH&S concerns, unfair dismissal, and sexual harassment. It also protects a company from damages caused by dishonest conduct by personnel, including as theft and fraud, as well as stock theft.
You could lose not only your business, but also your personal assets if you don’t have adequate protection.
- Cyber Liability Insurance
If your company has a website or stores sensitive client data on computers or laptops, you should consider purchasing a Cyber Liability policy. In the case of a cyber attack, Cyber Liability Insurance protects your company. Whether your website is hacked and vandalized, or your sensitive data and customer information is stolen, the cost of fixing the damage and the legal fees involved with a data breach can have a substantial impact on your business, not to mention the reputational harm it can create.
- Tax Audit Insurance
With the number of small businesses being subjected to random tax audits on the rise, it may be time to look into Tax Audit Insurance for your company. Dealing with audits may be a time-consuming, costly, and frustrating experience that can leave you thousands of dollars out of pocket. Tax Audit Insurance is designed to safeguard you by covering expenses spent during an audit or investigation, such as professional fees paid to accountants, lawyers, bookkeepers, and other consultants.
Doing your study and looking around, like with any purchase, is the best way to guarantee you receive the proper cover for your business – and at the right price. The simplest method to do this is to use a comparison site that allows you to evaluate products side by side and select one that fulfills all of your small business needs. At the end of the day, having the right insurance can be the difference between continuing to succeed and being left high and dry if you need to file a claim.