Insurance Policies You Should Get for Your Small Business

Small- and medium-sized enterprises (SMEs) account for the largest group of businesses in the United States according to the Small Business & Entrepreneurship Council. Citing data from the United States Census Bureau, the SBE Council noted that out of the almost 5.7 million employer firms in the country in 2011, 99.7 percent of them had fewer than 500 workers, while 89.8 percent had less than 20 employees. When the 22.7 million nonemployer firms composed mostly of self-employed individuals are included in the figure, the percentage of businesses with less than 20 workers increases to 98 percent.

While SMEs play a significant role in job creation, innovation, and propelling economic growth in the United States, many of them risk the survival of their businesses by not having enough protection through business insurance. For instance, about 60 percent of the more than 18 million home-based businesses in the country have insufficient business insurance. Many of these small-time entrepreneurs make the mistake of believing that a homeowners’ insurance policy would protect their business satisfactorily, but the reality is that such a policy does not provide coverage for business-related activity.

Whether your small business is based at home or you are operating a commercial space separate from your residence, it is important to protect your livelihood with the right insurance policies. There are many things that can happen when you are conducting your business that it makes sense to have liability and property insurance to provide you coverage in the event of a mishap or a disaster.

Some of the unexpected circumstances that small business owners may encounter include: 

• Slip and fall injuries involving customers who enter a business’ premises
• Vandalism, theft, arson, and other crimes that result in loss of business properties
• Fires and natural disasters that can damage or destroy equipment and commercial buildings
• Injuries to buyers, users, or bystanders caused by a defective or harmful product

While you might think that taking the necessary health and safety precautions is enough, you can never really tell when an accident or disaster will strike. It is best to have a business risk management plan that includes these important insurance policies:

Commercial general liability insurance

A commercial general liability insurance policy protects your business from the most common liability risks. When you are faced with a lawsuit because someone got injured in your business premises or when you are claimed to have caused damage to other people’s property, the commercial general liability insurance will step in to provide you financial protection. Commercial general liability insurance also covers claims of personal and advertising injury due to offenses like libel, slander, violation of people’s privacy, copyright infringement, malicious prosecution, and so on.

Product liability insurance

If your business manufactures, supplies, retails, or distributes products, you are responsible for any injury that these products may cause to users, buyers, and bystanders. Product liability claims can result from manufacturing defects, design defects, and failure to warn of the product’s potential dangers. A product liability insurance policy covers for such losses and injuries.

Commercial property insurance

Commercial property insurance policies are designed to provide coverage for damage to your commercial buildings, furniture and fixtures, equipment and inventory of goods, landscaping, and even other people’s properties. Covered events can include fire, smoke, storms, civil disobedience, and crimes like vandalism and arson. Commercial property insurance can also provide coverage for any loss of income you may experience when your business is temporarily shut down for repairs or renovations.

Business owner’s policy

A business owner’s policy is a commercial insurance policy that is typically designed for SMEs. It combines the benefits of commercial general liability insurance and commercial property insurance, making it a more affordable option for many owners of small businesses. Aside from providing coverage for liability claims and for damage to commercial buildings and business property, most business owner’s policy also covers business interruption when an enterprise is forced to shut down because of a covered peril (e.g. fire, storm damage, and so on).

Worker’s compensation insurance

Many workers are exposed to various risks. For instance, carpenters can suffer from fall accidents, while electricians run the risk of being electrocuted when working on electrical systems. Investing in workers’ compensation insurance can benefit small business owners by paying for the medical expenses of injured employees. It can also replace a portion of those workers’ lost wages, regardless if they are at fault for the injury or not. A worker’s compensation insurance policy can also provide disability and death benefits. 

Commercial auto insurance

Businesses that use delivery trucks, messenger vans, cars for worker transportation, and other types of service vehicles need commercial auto insurance to protect these valuable assets. This is the only appropriate policy that can help you cover liability risks associated with the day-to-day use of your service vehicles because a personal car insurance policy will not cover business-related accidents or events.

A commercial auto insurance covers damage due to collisions, liability claims resulting from injuries, deaths, or damage to other people’s property, your personal medical expenses, damage caused by uninsured or hit-and-run motorists, and damage due to other events like theft, fire, and vandalism.

Professional liability insurance

Professionals who provide specific types of advice or services need a professional liability insurance in order to avoid huge financial losses when they need to defend themselves from negligence claims made by clients. Examples of such professionals include doctors, lawyers, consultants, accountants, quality control specialists, home remodelers, construction firms, and so on.

Other insurance policies

Depending on your type of business, you might also need to get insurance policies that provide specific types of protection. Landlords, for instance, require landlord’s insurance and lessor’s risk insurance, which will help them cope with financial obligations in relation to the property they are renting out. Restaurant owners, on the other hand, can take advantage of policies like food spoilage insurance and liquor liability insurance (if one of your patrons cause accidents or commit crimes due to alcohol intoxication). Moreover, a garagekeepers legal liability insurance can help auto service shop owners protect their business from liability exposures when the clients’ vehicles under their care are damaged due to unforeseen events.

If you want to learn more about the different insurance packages available to small business owners in Texas, please get in touch with Quote Texas Insurance today by calling us at 817-385-1553 or by sending us a message. We will be more than happy to discuss your business requirements so we can create policies that are customized according to your needs.