As a manager or owner of a small company, it is a risky venture. You want to reap the maximum benefits. You can keep your risk levels low by purchasing small business insurance. This insurance isn’t for employees or you. Small business insurance should be a priority. Your goal is to find the best small-business insurance coverage for you and your employees.
You should start by understanding the basics of general liability insurance, property coverage, and workers’ comp. The function and purpose of the last two are quite simple.
Workers’ compensation insurance provides financial awards to employees who are hurt or disabled as a result of job-related circumstances. This coverage may be required, and it could be subject to regulation by state laws.
Small business insurance provides property coverage to protect against physical loss due to fire, accident or theft. This coverage allows you to repair or replace furniture, office equipment, supplies, inventory, and sometimes the building itself. This small-business insurance policy may cover your losses at their replacement value or for their cash value depreciated. The amount of capital available will determine the best option. You will save money on premiums by taking depreciated coverage (also known as actual casting value (ACV), but you will lose valuable time in the case of actual loss. You may also find that the item you require to replace is not available at the depreciated price, no matter how long you spend searching for it. This could result in significant out-of-pocket expenses. Small business insurance that covers replacement costs is the better option. It transfers more risk to insurance companies, which is why insurance is necessary.
The General Liability Small Business Insurance is a bit more complex. It protects your company from fraudulent or legitimate lawsuits.
Bodily injury – Harm to non-employees due to actions or inactions on the part your company. You will be covered under your small-business insurance workers’ compensation plan for harm to an employee.
Personal Injury – This includes but isn’t limited to libel and slander, false entry, wrongful imprisonment, malicious prosecution, and false imprisonment carried out by your company, or an agent.
Property Damage – The destruction of private property or real estate through an action by your company or an employee in the course of his or her employment.
Advertising Injury – Harm to an individual, or a corporate entity, due to your company’s advertising activities. This includes character defamation and plagiarism.
Insurance for small businesses that is general liability covers you against damages, as well as your legal fees. Even if you win a lawsuit, a court case can be quite expensive. You can get compensation for attorney’s and court costs as well as witness fees and earnings loss while you’re in court.
What amount of general liability small business insurance do you need? Simply put, as much as you are able to afford. You want to be able to pay the full value of your business. A minimum of one million dollars per accident and three million in aggregate is the recommended baseline, but this is not sufficient to address all possible outcomes that small business owners face. Different cases will require insurance coverage. Is your company often in contact with the public Are you able to produce dangerous goods? Consider recent court decisions in your region and for your type business, as well as the general liability requirements applicable to companies you might do business with. Your small business insurance agent can help you determine which option is best for you.
Most cases, a BOP (business owners policy) is the most cost-effective option. A BOP covers property, general liability, and other useful coverages in one small business insurance policy. A BOP is generally available to companies that are not involved in high-risk activities. This means lower premiums.