What You Need To Know About Insurance For Small Businesses

Insuring your business and properties are now a major trend in the business world. This is due to a lot of business interruptions such as accidents and the likes, but yet a lot of upcoming businesses do not bother with insurance as there is so much more to think about when setting up a new business. There is the issue of staffing, marketing, buying of equipments and other business needs. There are factors that determine what sorts of insurance your business requires so don’t be worried if your business type is a little bit difficult to classify.

Why do you need insurance? This is a question that must be answered if you are to invest in such excesses, but before we answer the why, we must know the “what”.

Insurance provides you, your business and your properties with protection against unforeseen eventualities such as damages, accidents, and others. Now, the why automatically answers itself doesn’t it.

I know a business man who runs a large poultry farm that supplies eggs and frozen meat to supermarkets. There was a disease outbreak that led to the death of thousands of birds and it seemed like he could no longer manage the business. He had lost too much to continue, but the great thing was that his farm was insured against disease outbreak. He was able to get the compensation for his insurance and now he has expanded his business to three more locations. This is an accident that should have led to a downward spiral, I mean… he should have hit rock bottom. But instead he just expanded and made more money instead. Imagine if he hadn’t taken that leap of getting his business insured. This is why you need insurance in a nut shell.

Who needs insurance and when

Every business from small to medium to large corporate organizations all need to be insured. It’s sometimes a prerequisite to do business for small business owners. Insurance should come immediately after the business kicks off because then there are activities running daily as well as risks. Here are some insurance types for small businesses;

  • Auto insurance

You can protect your personal vehicle and the company vehicles against all forms of damages. If you also have official cars for your employees they can all be insured.

  • Life insurance

This covers an individual’s family on demise. Accidents happen every day and can lead to loss of life.  The best way for an individual to ensure that their family is well taken care of financially upon demise is by opting for life insurance. Just think of the parental responsibilities this can solve and the opportunity to give your family a fresh start.

  • Home insurance

Some businesses especially startups are run very close to the home or in the home itself. A lot of people make their home their offices especially in regions where the weather is a little extreme. You have the opportunity to insure your home in case of any form of accident such as fire, flood, home theft, and a whole lot of other situations. This ensures that anything lost can be recovered.

  • Company Data breach

Most competitive companies out there take pride in their organization, knowing that they have an edge over competitors in form of company data. This is usually stored safely digitally. There are usually a lot of security measures taken in guarding company details but if there were to be a hack or a vulnerability leading to the leak of company details this would expose the company. This is where the company data breach insurance comes in. it ensures that the company is highly compensated for their loss. This sort of insurance is usually common with financial institutions and other big organizations.

  • Product insurance

This sort of insurance is mainly for manufacturing companies which make and distribute their own goods. Insurance on product liability ensures that you are protected from product defect or any form of product deformity that might lead to litigation. This doesn’t apply to ecommerce site owner especially those who are just typically middle men and do not manufacture nor distribute any goods.

  • Business owner’s policy

BOP is the most suitable insurance type for small businesses as this is way more economical. A BOP covers all business properties in its entirety. It covers, vehicles, equipments, properties and everything related, which is far more economical than ensuring each property separately. This is ideal for a new business and sets the stage for other incoming properties that could be acquired during the course of the business. The advantage of the BOP is that it protects you against all forms of business interruptions no matter what the causes are.

  • General liability

A business comprises of a facility, a ton of equipments, a lot of documents, assets such as company vehicles and also employees. The advantage of this is that it protects the business owner from any kind of liability or setback

Let’s say a construction company is operating on general liability insurance and on a regular work day one of the construction workers has a terrible accident that would lead to a surgery. This normally would lead to some serious financial commitment from the construction company but because there is a general liability insurance covering the company, the worker receives all the medical attention he requires at no extra cost to the company.  This type of insurance has its limits.

  • Professional liability

This is more of a career based form of insurance that protects you from litigation based on certain claims. This is usually applicable to professional jobs such ad medical doctors, lawyers, consultants and lot of other professions.

Every business needs some form or insurance or the other. No matter how safe your business seems and no matter how much planning has gone into the business to ensure smooth sailing. There is always that probability that might take you unawares.