As a business owner, regardless of your scale of operation, having adequate business insurance coverage is crucial to your business’s existence. Business insurance refers to a wide range of policies crafted to protect your business from future financial losses. Every business model has its own specific set of risks, which is why it is essential for business owners to tailor their insurance coverage based on their unique needs. In this guide, we will be discussing the coverage options that you can explore as a small business owner in California.
Understanding the Major Types of Small Business Insurance
There are various types of small business insurance policies that will protect different parts of your business and operations. Purchasing any or a combination of these policies will go a long way in protecting your business from liabilities. These include:
● Workers Compensation
● Errors and Omissions
● General Liability insurance
● Property insurance
● Commercial Auto insurance
● Business owner’s policy (commonly known as BOP)
● Commercial Umbrella insurance
● Health Insurance
How to Decide on the Insurance Coverage You Need
When running a small business, you need to strike a balance between your limited resources and your customer’s demands, ensuring that you do not run out of resources while trying to meet their needs. One way to prevent the exhaustion of funds involves allocating resources to get maximum output. However, in the event of an unforeseen financial liability or lawsuits brought in by unsatisfied customers, having an adequate business insurance policy will protect your business operations. Here’s what you need to know about the different policy options before deciding on the insurance coverage you need.
- General Liability insurance protects you in the event of third party claims. It helps you cover costs that may arise from claims that involve property damage, bodily injury, or medical expenses incurred by third parties because of your products, services, or general business operations.
- Workers Compensation covers a business’s employees if they are injured or become sick while working.
- Small business health insurance provides health coverage for between 1-50 employees, and it is a less
expensive alternative to individuals with a large staff who need health insurance coverage.
- Errors and Omissions is a policy that protects your business from lawsuits or claims filed by your clients. Also known as professional liability insurance, it will protect your business against claims of mistakes, negligence, and malpractice filed by your clients.
- Property insurance will protect your physical assets from fires and other disasters. It will keep your place of business insured and give you the required capital to bounce back in the event of any disaster.
- Commercial Auto insurance provides coverage to company cars and trucks. If you operate any business that relies on vehicles, you will need to get coverage for each vehicle in your fleet, as personal policies do not extend to commercial vehicles.
Additional Types of Liability Insurance
There are other specialized liability insurance policies that you can purchase as a small business owner. These policies are not as mainstream as the policies listed above but can prove crucial in protecting your business from claims and liabilities.
A few examples are as follows:
- Products Liability
- Directors and Officers
- Employment practices
- Liquor-related incidents
How Much Will Your Small Business Insurance Cost?
The average cost of small business insurance will depend on several factors, including the scale and location of your business, the risks involved, your claims history, and so on.
Getting the right insurance coverage for your small business can give you a variety of benefits along with peace of mind. If you need assistance with business insurance, contact the experts at Burton A. Harris Insurance Agency today. We are happy to answer any coverage-related questions you may have.