Business Insurance Explained
You just started, or are getting ready to start, your business, your idea is finally coming to fruition. You’ve made your business plan, told your friends and family and are getting ready to take the final steps toward pursuing your dream. Starting a business is such an exciting yet intimidating thing to do and brings feelings of excitement, hope and, sometimes, fear. You’ve done everything you think you need to do to prepare for your journey as a business owner, but have you thought about business insurance?
Insurance is typically one of the last things new business owners think about when they’re venturing into the world of self employment. It is not at all uncommon for a new business to go without insurance for as long as they can. Unless you have employees, insurance isn’t required so, to save money, many will go without business insurance. While the short term savings may be attractive, an accident could happen at any time. The scenarios are endless but most end in a lawsuit that most new business owners aren’t prepared for.
The average cost of a lawsuit for businesses is $54,000, as a new business owner are you financially prepared for that? The answer is usually no, most entrepreneurs put all the money they make back into their business and only leave themselves enough to live on for the first few years. If the lawsuit arises out of an accident that would be covered through your insurance the costs will be far less, usually just the deductible, if it even applies. Most general liability policies don’t have deductibles for liability claims.
So what kind of business insurance do you need? Well, it all depends on what kind of business you have. Most businesses need a general liability policy which covers bodily injury and physical damage that arises during the course of business. If someone visits your location and ends up slipping on your welcome mat, your general liability policy would cover the cost of their medical treatments and any other costs associated with the injury.
Most businesses generally need some kind of property coverage as well. This would cover buildings and contents owned by the company. Your computers, printers, desks, chairs, and any other miscellaneous property would be covered by this policy. If your building is somehow destroyed the costs to replace everything you lost could be insurmountable, forcing you to close shop for good, which we wouldn’t wish on anyone.
Another common type of insurance most businesses will purchase is business interruption coverage. This covers the loss of income resulting from most catastrophes that would disrupt the operation of the business. This could also include the extra expense of operating out of a temporary location. This coverage has helped many small business owners stay afloat during the hard times that follow a covered loss.
The three coverages mentioned above are so common for small businesses that most insurance companies offer them in a package, commonly referred to as a BOP, business owners policy. This kind of package policy is generally very affordable for most businesses, especially considering the value they contain through the coverage provided. BOPs have been the saving grace for many businesses in America, keeping them going through tough times.
The coverages that BOPs don’t provide are professional liability, auto insurance, workers compensation insurance or health and disability insurance. If you have vehicles you use to facilitate your business or have employees you will have to get additional policies to cover those exposures. Luckily for you, those are not difficult or expensive policies to purchase, depending on your operation.
There are many types of businesses, too many to count really, and they all have their own unique exposures. A business that manufactures and sells goods will have very different insurance needs than a business offering professional services, like lawyers or consultants. Finding an experienced insurance agent to help guide you through the insurance shopping and purchasing process is the best way to make sure your business is adequately covered.
HD Insurance has been helping business owners find comprehensive and competitive insurance policies for over 25 years. If you’re in the process of starting your business or have an established company and want to make sure you’re covered or not paying too much, we would love to help you with your insurance needs! Click the button below to request a quote!