Choosing the right insurance policy for your small business isn’t a small feat. You must take a variety of factors into account, including:

  • What type of business do I have?
  • Where is my business located?
  • How much coverage will I need?

We’re here to help you cast your safety net for all those unforeseen events small businesses can face.

Types of Business Insurance

Let’s decipher seven standard insurance policies for small businesses and, by taking these factors into account, help you decide on the policy that best fits you.

Commercial Property Insurance:

Commercial property insurance has you covered in the case of a catastrophic event. This could refer to a fire, explosion, burst pipe, storm, or theft. The coverage included in this policy can seem broad. You will receive compensation for losses or damage to the building, leased or owned equipment, or anything deemed necessary for performing normal business operations.

You can purchase commercial property insurance as part of a comprehensive business owner’s policy or stand-alone policy. Additionally, you can buy your policy coverage as replacement cost or actual cash value.

General Liability Insurance:

General liability insurance will cover your claims involving property damage and bodily injuries resulting from your operations, products, or services. If you are held legally responsible for any bodily injury or property damage, this policy can help cover medical expenses and attorney fees resulting from these claims.

Here are the four coverage elements of general liability insurance:

Premises Liability

You are covered if a person you do not employ becomes injured on your property.

Products Liability

In the case that a product or service causes injury or inflicts damage on a consumer’s personal property, you are covered.

A Personal Injury

When your business inflicts physical, financial, or mental harm to a third party, you’ll be covered.

Advertisement Injuries

If your company causes damage due to alleged misinformation, copyright infringement, or slander, you’ll be covered as well.

A general liability policy will ultimately cover you when or if a third party decides to sue.

Employment Practices Liability Insurance (EPLI):

The EPLI policy covers any wrongful acts that occur during the employment process. Covered issues may include sexual assault, discrimination, breach of employment contract, and wrongful termination. This type of policy may cover costs related to defending a lawsuit in court or for judgments and settlements. Whether you win or lose in court, EPLI covers typical legal expenses. However, these policies usually do not pay for punitive damages, civil fines, or criminal fines.

Cyber Liability Insurance:

If any portion of your business or business operations takes place online, consider cyber liability insurance. Protect yourself from a cyber-attack or interruption that can cause a loss in data, revenue, and—most importantly—the trust between you and your customers.

It’s essential to understand that cyber liability insurance can cover first-party AND third-party claims. This policy can help your business recover from any losses resulting from a cyber attack or cover people outside the business who were injured due to online fraud.

Workers’ Compensation:

Typically required by the state, this insurance policy covers employees that suffer from work-related injury or illness. If an employee incurs a work-related injury, their medical bills and wage replacement can be covered. Workers’ compensation will also cover any civil suits brought against your company should an employee decide to pursue you for a related injury.

Commercial Auto:

Commercial auto will cover the costs of an auto accident, including damaged property and medical expenses. You should strongly consider this policy if:

  • Your business owns, leases, or rents vehicles
  • Your business has employees who drive their vehicles to conduct business.
  • Your business has employees who operate leased, rented or owned company vehicles.

Professional Liability Insurance (E&O):

Protect your business against claims stating you caused a person to suffer from a mistake in business. Professional liability insurance, also commonly referred to as errors and omissions insurance, is not always legally required, but it is highly suggested for every business owner.

Many industries need professional liability insurance, such as medical providers, attorneys, legal service providers, business consultants, and brokers. You should especially consider this type of insurance if your business works directly with customers or offers advice.

How Do I Pick the Right Plan?

Hopefully, these in-depth explanations helped you to understand how each policy can protect you. Additional questions such as industry standards and state legislation may further guide your decision-making process. You don’t have to pick one or the other when it comes to small business insurance policies. Get connected to a local insurance broker to discuss which policies would provide you the most benefits and how much coverage your company should consider.

We’ll find the right plan for your business.

Trust Beimdiek as your local business insurance provider. Our team can answer questions and develop quotes and proposals to narrow down your consideration process.

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