Horror stories are all too common. There are many horror stories about small business owners being sued by clients or customers. What is the result? This could happen. It could all be a simple accident like a server spilling water on a restaurant’s computer, or a client falling in your office.
It is possible to protect your business from these and other risks before you panic. Your small business can be protected from such unfortunate events by having the right insurance.
Are you covered? Check out the APOLLO Insurance checklist below to see what types of liability insurance are required to protect your small business.
1. General liability insurance
General liability insurance, also known as commercial general insurance, protects your business against claims for property damage, bodily injuries, and personal injury. What does this all mean? If a client falls in your store, office, or damages a customer’s computer, general liability insurance will cover the loss. Your small business is protected against personal injury claims such as being sued for defaming a client via social media.
Is liability insurance necessary for every business? Liability insurance is essential for any business that has staff members or clients who have physical access to their equipment or represents the client’s company. Clients may sometimes require that you have general liability coverage to conduct business with them.
2. Professional Liability Insurance
This insurance, also known as E&O or errors and omissions insurance, protects your small business from customers or clients who claim you have been negligent in your work. Professional liability insurance, for example, would protect your company if a client claims you made an error in tax preparation.
What business needs professional liability insurance? Professional liability insurance protects you against financial loss from third parties, such as customers or clients. This type of insurance is required if you offer professional services or advice to clients. Clients insist that you have this coverage before entering into a contract.
3. Business Owner Policy
Although general liability insurance protects your business from losses suffered by clients or customers, it doesn’t cover the losses of your business, such as property damage or equipment loss. For small businesses, you should look for a Business Owners Policy which combines general liability insurance and property liability insurance. A Business Owners policy that can be tailored to cover you for losses due to business interruption, employee theft, and electronic data loss is a smarter choice.
A Business Owners Policy (BOP) is an excellent idea for employees who own buildings, have large data sets, or own equipment.
4. Home-based insurance for businesses
Many home-based businesses believe that their homeowners’ insurance covers them. It will not cover losses related to business in most cases. You will need a separate policy for home-based businesses to protect your losses if clients or customers are hurt at home. There are two options: You can either get professional liability insurance or general liability insurance for your home-based business, or you can purchase a Business Owners Policy that covers both of these types of insurance.
The first step is to find out as much information as possible about the best insurance options. Look into what small businesses are buying based on their industry and company risk. You can also ask an agent for advice.
Bundling policies can often get you a discount on your premiums, just like auto and home insurance. You may be able to save if you combine your business insurance policies with one provider.
Your monthly premiums will be lower if you increase your deductibles. This might sound like a good option if you want to pay less monthly out-of-pocket costs. However, higher deductibles can mean higher upfront costs if you need to file a claim. Consider your situation to determine which option would be best.
You should have a plan in place for managing both internal and external risks. Fraud, which can include revenue skimming and billing, expense reimbursement, or other forms of corruption, is an internal risk that you should consider. You should also plan for the possibility of losing a key employee or an injury or illness that results in your disability.
Your coverage requirements can change as markets and situations change. Talk to your agent about any changes that may be needed to your policies at renewal.
Aside from the things mentioned, different professions and industries have different insurance needs. For your business to be protected, find an insurer that offers customized business insurance policies. Talk to an agent who has small-business experience to ensure you have the right coverage.