Starting a business is daunting at the best of times and choosing the right type of small business insurance only adds to the pressure. But business insurance keeps you afloat should the worst happen. It all comes down to your business needs, so it’s important to make sure you’ve covered every risk.
Good business insurance policies protect your business assets should something go wrong. They cover financial losses for compensation and even legal costs, so you don’t have to worry. But first, you need to know how to choose the right insurance for your startup; we’ve got you covered!
Consider Every Option
If one thing’s for sure, it’s that there are plenty of business insurance options out there for you. It’s a matter of choosing the right one and taking your time to research your options. Here are a few business insurance types to consider:
- Workers’ compensation insurance
- Professional liability insurance
- General liability insurance
Now you’re likely looking at your options, wondering what they’re all about. Don’t sweat it! We’re here to help you make the best decision without fishing around the small print.
Why Even Small Businesses Need Insurance
Though your business may only be small, your workforce is likely mighty!
All businesses have many hands, hearts and brains behind them. They are all worth protecting. After all, a happy workforce makes a successful business – wouldn’t you agree?
Every business is worth protecting, no matter how big or small. And you’ll find that the right business insurance will save you mounds of time, money and stress. Plus, some insurance providers offer employee perks, too.
It also gives peace of mind where needed. Having everything under control when the worst happens is reassuring for workers and clients. That way, they know they won’t be out of pocket.
Workers’ Compensation Insurance Explained
First, we mentioned workers’ compensation insurance. This is the only type of business insurance required by law. You’ll need workers’ compensation insurance if you have employees. Without it, you could pay out up to $3,370 every day through fines.
In some cases, the legislation makes exceptions. For example, if you only hire immediate family members. In short, it covers claims for injury or damage caused by the employee’s work. Suppose one of your restaurant workers trips over a loose floorboard and they break their leg. Having workers’ compensation insurance means you won’t have to worry about compensation.
Professional Liability Insurance Explained
Next, we have professional liability insurance. This protects you against compensation claims from clients who think you’ve made a mistake in your work. For example, a breach of GDPR, infringing copyright, or even giving advice that results in a financial loss for your client.
For businesses specializing in professional services or advice, professional liability insurance is crucial. It helps keep everything in check between you and your clients. You need to protect your assets against the unexpected.
A good example is marketing agencies that produce bespoke, tailor-made client work. Let’s say one of their clients wants them to produce a podcast, and they used copyrighted music without permission. The copyright holder could sue your client for copyright infringement – it can happen to the best of us!
In this case, your client would likely demand compensation from you to cover the legal costs involved. Your professional liability insurance would cover these costs, as well as compensation fees for your client, too.
General Liability Insurance Explained
Then we have general liability insurance. This is perfect if you invite customers to visit your business premises or you visit your clients instead. If anyone claims your business caused injury or damage in some way, this has you covered.
Let’s say parked cars around roadworks become damaged by a worker as they move past to complete their jobs. This insurance would cover the cost of repairing the damage in this case. It also protects you if you sell a product that you did not know has a manufacturing fault and causes injury to a customer.
Like professional liability insurance, general liability insurance foots the bill for legal costs. It will also cover any compensation payments up to your policy limit.
Consider Getting Buildings and Contents Insurance
If you have business premises, like a store or an office, buildings and contents cover is definitely worth considering! Remember, if you rent the space, you’re only responsible for covering your contents. Your landlord should cover the building with their own insurance. But if you’re starting up a home-run business, be sure to check your home insurance policy documents and the fine print.
For business activities not covered by your standard homeowner’s policy, you’ll need to contact your insurance provider. You’ll be able to make the best decision when you’re in the right hands.
Other Things to Consider
Think about the risks you’ll be taking if you choose the wrong insurance for your startup. It’s a matter of making or breaking the business you’ve worked so hard to build from the ground up. When it falls down to it, it’s not worth the risk. But now you can wipe the sweat away – the hardest part is finally done!
All that’s left to do is think long and hard about your business needs and what’s at risk without insurance. Then, when you’ve got an idea of the things you need to protect, you’ll know exactly which type of insurance is best for your small business.
Last Words…
Don’t sweat the small stuff! It’s not worth it.
As long as you do your research (hopefully, we’ve helped with that!) choosing the right business insurance is easier than it sounds.
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