Running a small business is a lot like managing a small country. You're responsible for everything from payroll to inventory to security — and you can't forget about insurance. We could write a book about everything you need to run a small business, but for today we're going to focus on the different types of insurance you need to keep a small business running.
1. Business Owner's Policy
While you can pick up each of these policies on their own, a business owner's policy is a comprehensive package that includes all the different insurance plans you need as a small-business owner. This might include:
- Property insurance: This policy will protect you if your business property is damaged, by anything from theft to fire to vandalism.
- Business interruption insurance: If you have to close your doors for any length of time, business interruption insurance will ensure you don't lose too much money.
- Vehicle coverage: If you maintain a fleet of company vehicles, this particular insurance policy is a must-have.
- Liability insurance: General liability insurance protects everything, from employee or customer injury to property damages.
- Crime insurance: If your business is burglarized, either in person or online, crime insurance can help you pick up the pieces.
Business owner's policies are often mix-and-match. If you don't have a fleet of vehicles, you don't need vehicle coverage insurance, for example.
2. Workers' Compensation Insurance
On-the-job accidents are more common than most people believe. In 2016 alone, there were more than 2.9 million nonfatal injuries in the workplace. Even if you have comprehensive safety rules in place, injuries and accidents can happen. Workers' compensation insurance covers any medical expenses or damages without having to pay for them out of your pocket.
If you have no other insurance policy but you have employees, make sure you have a workers' compensation plan in place. Otherwise, even something as simple as a slip and fall could end up costing you hundreds or thousands of dollars.
3. Data Breach Insurance
It's hard to run a business in today's economy without a robust online presence, but being online means you're also vulnerable to data breaches. This is a relatively new kind of insurance, but it has quickly become necessary, as data breaches are happening every single day. If you store any sort of information in the cloud or have a website or online store, invest in data breach insurance to protect your company if it's ever hacked.
The exact details of your insurance policies will depend on the kind of business you run. A retail shop would need different insurance than a medical office, for example. One thing remains the same regardless of your industry — you need protection. Make sure you've got enough coverage that you're prepared for anything the universe throws at you, from an injury lawsuit to a wildfire and everything in between.
Insurance might be costly, but it's not optional if you're a small-business owner. Make sure you've got a comprehensive plan that will protect you, no matter what.
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