Types of Insurance for Small Business Owners

The different types of insurance types and options available can be overwhelming for small business owners and entrepreneurs. How do you know which type of insurance your business needs? What can you fiscally afford on a startup�s budget? What can you not afford to cut out based on legal liabilities and proper protection of your assets? These are the types of questions that plague many entrepreneurs from day one, even without having employees to consider. When employees come aboard, a whole new set of questions are posed. Fortunately, it isn�t as overwhelming as some insurance companies make it out to be. Here are some common types of insurance that benefit small business owners.

Health Insurance

If you are leaving the corporate jungle to venture out on your own, you are likely leaving behind health benefits with your regular paycheck. This can put you, your family, and your business at risk should injury or illness occur. Furthermore, if you have employees, you may be legally required to offer some form of health benefits. This, of course, depends on your location. The best approach is to get a quote for small business health insurance and work with a broker who will find you the best option for your personal and business needs. An experienced broker should be able to direct you regardless of if you are a one person operating alone or have fifty employees on the payroll.

Worker�s Compensation

If you have employees, you need to have worker�s compensation insurance. Many entrepreneurs mistakenly think they only need this protection if their employees are responsible for physical labor. On the contrary, something as simple as an administrative assistant tripping over an open filing cabinet can result in a worker�s compensation claim. Worker�s compensation will cover you during the investigation process to determine whether or not you are at fault. While having workplace safety policies in place can help reduce the need for this insurance, accidents happen when you least expect it.

General Liability Insurance

General liability insurance covers you if you, your employees, or your products and services cause someone harm. This can mean anything from a product malfunction to your delivery man hitting a pedestrian or a mailbox. Should one of these situations occur, the insurance will cover any damages and fees incurred while defending yourself in court. General liability insurance is a must-have for any business owner, even a home-based one. Consider it a case of hope for the best, prepare for the worst.

Professional Liability Insurance

Like general liability insurance, professional liability insurance covers you if you are sued for failing to render promised services. General liability insurance does not cover this. If you are a contractor who fails to complete a job as promised, your professional liability insurance will keep your assets safe when someone submits a claim. Any business owner can benefit from this insurance, from a hairdresser who mistakenly cuts their client�s hair too short to a lawyer who fails to get their client off the hook. While it is still up to the claimant to prove your error or omission, the legal process can be costly; this insurance will help.

Commercial Automobile Insurance

Even if you are the only one driving your vehicle, you should still have commercial automobile insurance. If you were to get in an accident during a work-related excursion, and especially if a client or colleague was in the vehicle as well, this form of insurance would protect you and your assets. If you use a personal vehicle and fail to inform your insurance provider that it is used for commercial purposes, you risk voiding your contract and having your claim refused. This can cost you a lot of time in legal fees and out-of-pocket payouts. While commercial automobile insurance may cost you more than personal vehicle insurance, the expense is well worth the safety net it provides.

Tenant or Homeowner�s Insurance

Whether you rent office space or work from home, you need to protect your investment. Tenant�s insurance will cover your equipment if something happens to your office building. Homeowner�s insurance� depending on your policy� can cover the building itself, your belongings inside, and any incidents that happen to you or a visitor on the premises. If you are conducting business out of your home, be sure to inform your insurance provider to ensure you are adequately covered. Protect yourself further by conducting business meetings in a neutral location whenever possible.

Data Breach Insurance

Technology certainly makes work easier, but it comes with unique challenges. When you are in possession of confidential information � whether in paper form or online � you are responsible for keeping it safe. In an online setting, that means security measures to ensure hackers can�t access the data. Alternatively, if someone accesses your private employee files without your knowledge, you are liable for the breach of security. Data breach insurance covers any claims that may happen as a result, so long as you took proper precautions initially. For example, if you decided to leave your employee files on your desk rather than locking them up, your policy might be void.