What insurance does your small business need?

If you’re like many small business owners, your business may not be adequately insured in the case of a fire, flood, natural disaster, theft, or personal injury.

Often home-based business owners assume they are covered under their homeowner’s policy. Other entrepreneurs, working long hours and pulled in too many directions, may never get around to talking to an insurance agent about their business.

If you’ve been procrastinating on business insurance, consider this: small businesses are much more likely than larger companies to be devastated in the event of an unforeseen loss, and business insurance needn’t be costly. You can save money on a bundled business insurance package or lower your premiums by simply increasing your deductible.

Look at these 4 essential types of business insurance designed to protect businesses of any size.

• General liability insurance. Protects business owners should they, an employee, product, or service cause personal injury or property damage to a third party.
• Property insurance. Protects business owners who own a building or other valuable assets (e.g. equipment, computers, tools, or inventory) in case of fire, flood, vandalism, or theft.
• Business interruption. Protects business owners from financial loss should business activity be suspended for a period of time (e.g. following a theft, flood, or other unforeseen loss).
• Vehicle coverage. Protects business owners for damage and collisions when vehicles owned or leased by the business are used by staff to perform their jobs or transport products/equipment.

Save cash with a business owner’s policy

Several factors come into play when determining business insurance premiums, including the type of business insured, location, gross revenue, and types of coverages required. A business owner’s policy (BOP) offers the most complete coverage in a customizable bundled package, and the best value.

This type of policy typically includes:

• Liability insurance
• Property insurance
• Crime insurance
• Business interruption insurance
• Vehicle coverage

Insurance for home-based businesses

If you run a business out of your home, you may prefer an add-on or rider to your homeowner or renter insurance rather than a separate comprehensive policy. This can be a cost-efficient option for solopreneurs who don’t own a large amount of inventory or valuable equipment—in other words, a business owner for whom a fire, theft, or flood won’t greatly disrupt or devastate the business.

An in-home policy is another option for home-based business owners who need greater protection than a rider or add-on to an existing policy can offer. This type of policy often costs a bit more than a rider but protects the owner and up to three employees against theft, injury, and other risks to the business.

Final tips

When it comes to protecting your small business, your profit margins aren’t what should determine whether to get insurance. What matters is how great the impact would be to your business should something unexpected go wrong.

Get in touch with a reputable insurance company, or seek out an independent business insurance broker, to do a risk assessment for your business—then see exactly what kind of insurance you need.

If cost is a barrier to getting business insurance, take heart; your premiums may very well qualify as an end-of-the-year tax write off.