The following guest post was contributed by Embroker, a San Francisco based business insurance firm.
If you own and operate a small business, chances are you are focused on growth. You want to take your brand to the next level, whether that means expanding to new geographic locations or spreading the word to customers in your local niche.
If you care about growth—or the future of your business—you need to care about insurance. Without the necessary insurance coverage, a single mishap or lawsuit can crumble your business. With the proper insurance, you can weather the storms to become the successful brand you want to be. Here are six types of coverage every small business needs.
If your business fails to do its professional duty to a customer or client, you could be the target of a lawsuit. For instance, if you run an accounting firm and make an investment decision that costs a client millions of dollars, the client might come after you for the money. In short, professional liability insurance protects your company against its own mistakes and failures. This type of insurance is common in fields such as real estate, law, and medicine (where it is often labeled as “malpractice insurance”), but has value for any business that offers a professional service.
If a customer slips, falls, and hurts himself on your company premises, he could file a liability lawsuit. If an employee backs a company truck into a civilian’s car, that person could sue you, too. General liability protects you in these situations, where a third party blames your business for bodily injury, property damage, slander, and more. By covering your legal expenses and settlements, general liability insurance can prevent these lawsuits from becoming potentially disastrous hurdles.
Most states require businesses to hold workers’ compensation if they have any employees at all. So, unless your business is a sole proprietorship, you probably need workers’ comp. If an employee gets hurt on the job, workers’ compensation will cover their medical expenses and lost wages while also shielding you from liability. If a worker is fatally injured on the job, your workers’ comp insurance should also cover death benefits for the employee’s family.
Whether you own your business property or lease it from another owner, you can’t go without commercial property insurance. This type of insurance covers you against damage related to fire, storms, vandalism, and other disasters, as well as against theft. The coverage can also extend to your product or supply inventory, your furniture, your electronics, and your equipment or tools.
Unless you’ve been living under a rock, you’ve probably read news headlines about corporate cyber breaches in the last few months. Hacks and cyber vulnerabilities have become common problems for businesses. And while it’s usually the big hacks and the big companies that make the news—like Target or Equifax—no company is immune to cyber breaches. If your business stores customer payment information, employee Social Security Numbers, or any other sensitive personal information, you need cyber insurance. This type of coverage protects you from hacks and their consequences, including legal costs, forensic accounting, credit monitoring, and more.
Most small businesses can’t afford any downtime. However, if a hurricane hits your area or some other disaster or event forces you to shut down, you need a backup plan. Business interruption insurance is precisely the backup plan you need, covering losses from business downtime.
Likely, your business already has at least a few of these insurance policies in place. However, the fact is that many small businesses are missing at least one type of coverage from this list—be it cyber insurance or professional liability coverage. Don’t say goodbye to your business and your dream just because you didn’t have the right coverage in place to shield you from an unforeseen incident. Instead, use this article as your checklist when you go to talk to your insurance broker about policies for your small business. With comprehensive coverage, your chances of building your brand into a force to be reckoned with will go up exponentially.