Small Businesses: What Insurance Should You Carry?

 

We’ve all heard the saying that “you can’t run a business without insurance.” But what does it really mean, and how much should you expect to pay? If you’re starting up your own small business, or thinking about expanding an existing one, this is the post for you.

I’ll cover everything from liability coverage (that is, what happens if someone gets hurt on your property) to workers compensation (what happens if one of your employees gets hurt on their way to work).

In this post, we’ll go over all the ins-and-outs of insurance for small businesses—including ways you can save money while still protecting yourself against lawsuits and costly mistakes.

What Insurance do I Need to Run a business?

As a small business owner, you’re responsible for ensuring your business is protected. But what insurance do you need?

• General liability: This type of policy covers accidents that happen on your premises or to customers on your property. You may be held liable if someone slips and falls in the grocery store aisle, or if they get hurt visiting your restaurant while they wait for service. General liability can also cover any claims against you from employee lawsuits if an employee is injured at work.
• Workers compensation: This type of insurance pays medical bills for employees who are injured on the job—even if it’s not their fault (e.g., getting hit by a car while riding a bike home from work). The benefit here is that workers comp doesn’t require proof that negligence was involved in order to compensate employees who have been hurt due to unsafe conditions at work; instead, it simply provides benefits based upon what happened during the course of employment itself (and regardless whether or not anyone was negligent).

What is Workers Compensation?

Workers’ compensation is a form of insurance that covers medical costs, lost wages and other expenses if you’re injured or sickened at work. It covers you whether you’re an employee or self-employed. The cost of workers’ comp varies by state (usually between 2% and 5% of payroll) but can be deducted from your paycheck before taxes are taken out.

If you don’t have workers’ comp, it’s time to get busy researching how to obtain coverage for your company employees—and yourself!

What is general liability insurance?

General liability insurance covers a wide range of potential claims. It covers bodily injury, property damage and other costs like legal fees. You can buy a policy that covers your business for a set period of time, or for as long as you want to keep the policy.

How Can I Reduce My Premiums?

You can reduce your premiums by:

• Checking the small business bureau. If a company has complaints filed against it, this will be reflected on the website. You can use this information to choose which insurance provider would best suit your needs.
• Getting a certificate of insurance. When you purchase an insurance policy, ask for a certificate of insurance so that you know exactly what coverage is being provided and how much it costs each month. Remember to check this document periodically because the amount could change over time due to increases in premium rates or changes in coverage options offered by your company’s insurer as new laws pass into effect (such as minimum wage). It’s also important that all employees sign off on any changes made to their plan before they go into effect so everyone’s aware of what they are responsible for paying when filing claims; otherwise discrepancies may arise later down the road after someone else files one without letting anyone know about it first!

Why Else do I Need Liability Coverage?

Liability coverage is a good idea if you have a lot of customers. If someone gets hurt at your business, they might sue you. Liability insurance protects your personal assets from lawsuits and allows you to pay for their injuries out of pocket. You should also consider buying liability coverage if you have employees or have invested a lot of money into your business.

What if I sub out some of the Work to Other Contractors?

If you hire sub-contractors to do work on your property, or if you use a cleaning service that sends agency workers in your place, there are still some things you need to consider. If a sub-contractor causes damage while they’re working on the premises, they may be covered by their own insurance policy. However, if their actions cause damage to one of your other suppliers and/or clients, then it could also be partially (or even fully) responsible for this loss.

Therefore, it is essential that any contracts between yourself and other contractors include clauses stating who will pay for what should an accident occur at either end of the contract chain.

How much should I expect to pay for insurance?

The cost of your insurance will depend on a number of factors. It can be based on:

• Your business size and employee count
• The location where you operate your business
• Your industry (for example, construction or manufacturing)
• The type of work performed by your employees (for example, landscaping or cleaning)

It’s important to remember that premiums are affected by claims history. If you’ve filed a lot of claims in the past, this could mean higher premiums for you in the future. Likewise, if you have poor credit history or limited assets available to pay claims as they arise—like many small businesses do—your premiums are likely to be higher than someone with good credit who has more assets at their disposal.

You should have workers compensation, general liability and property coverage for your building and equipment.

General Liability Insurance: This covers you from lawsuits that occur from an accident on your business property. If a customer trips on your floor and breaks his/her leg, then you’re likely to be sued by the injured party. General Liability insurance covers these types of incidents so that you aren’t personally responsible for paying their medical bills or any other legal fees associated with the incident.

Property Coverage for Your Business Equipment & Property: This type of policy will cover repairs or replacement costs if something happens to one of your computers, printers and other essential equipment used in running your business (e.g., cash registers). It also covers damage done to things like inventory stored inside a building owned by the insured person or organization; vehicles parked on premises owned by the insured person or organization; tools used by employees while working at locations owned by the insured person or organization

Conclusion

We hope we have helped you make sense of insurance for your small business. As you can see, it’s not as complicated as it may seem. The key is to think about what risks are unique to your industry and make sure that your coverage protects against those risks. In addition, make sure your policy covers all of the types of injuries that happen in the workplace (including car accidents) so that if someone gets hurt on the job they won’t have any issues getting compensated by their employer!