In the Business of Good Coverage: How Much Should Business Insurance Cost, and Which Type of Coverage to Choose for a Small Business?
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Did you know that 75 percent of businesses in the United States are underinsured? Do you want to protect your company from being one of them?
If you’re worried about a lack of insurance but don’t know where to begin as far as coverage goes, you’ve come to the right place. Everything you need to know about insuring your company, from business insurance cost to the different types of business coverage, is explained down below.
Why Does Business Insurance Matter?
With so many companies in the country being underinsured, it might be easy to assume that insurance isn’t really that big of a deal. It’s essential, though, if you want your business to stick around.
Here are some specific reasons why business insurance matters to companies of all kinds:
Be Legally Compliant
First of all, it’s required by law in most states for all businesses to have some kind of insurance. Check to see what the specific requirements are in your area to ensure you’re abiding by them.
Protect Your Employees
Even if insurance isn’t required by law, there are still plenty of reasons to have it. For example, having a good insurance policy helps you to protect your employees in the event that they get hurt on the job. It will help cover the cost of medical care and lost wages, as well as things like funeral arrangements.
Protect Your Customers
Insurance helps you protect your customers, too. If someone gets hurt on your property, for example, you can use your insurance coverage to help pay for their medical care. Insurance can also come in handy if something goes wrong with your product and it ends up causing damage or injuring a customer.
Don’t forget, business insurance can protect you and other key players in your business as well. If your business is involved in a lawsuit, for example, your business insurance can shield you from some of the damage and keep your personal assets safe.
How Much Does Business Insurance Cost?
It’s not always easy to calculate how much your business insurance will cost. It depends on lots of factors, including the type of coverage you select, the specific risk factors your company presents, and the insurance provider you choose.
It’s not uncommon, though, for businesses to spend several hundred dollars per month on basic insurance coverage.
As you can see, this isn’t a significant cost for most companies. It could save you a lot of money later on, though, which is why it’s so worth it to invest in good insurance.
What Kind of Insurance Should You Choose?
When shopping for business insurance, it’s important to be aware of the different types of coverage available to you. The following are some of the most important types of insurance in which you might want to consider investing:
This is also known as errors and omissions (or E&O) insurance. It covers your business against claims of negligence due to harm. The specifics of this coverage will vary depending on your industry and the risks associated with it.
Property insurance, as the name suggests, helps to cover your property and protect it from damage. This includes damage caused by bad weather, a fire, or a flood. It also covers property damage due to theft or vandalism as well.
This is a must for any business owner who doesn’t want to spend tens of thousands of dollars (if not more) on repairs and replacements.
Workers’ compensation insurance will protect your employees in the event that they’re injured on the job. If they get hurt while working, your workers’ compensation coverage will help to pay for their injuries, as well as the time they have to take off work while they recover.
If part of your business involves manufacturing and selling products, it’s a good idea to invest in product liability insurance. If one of your products causes some kind of harm or damage to your customers, you’ll want to have this coverage to protect yourself in a lawsuit.
Do you have business-specific vehicles that you and your employees drive? If so, you’ll definitely want to get those insured.
Depending on how comprehensive the coverage is, it will help to protect your employees, the vehicle, and anyone who gets injured or has their car damaged in the event of an accident.
Another type of business insurance you ought to consider is business interruption insurance. If operations are interrupted due to a natural disaster or another crisis, this type of coverage will help to minimize the financial losses you and your employees might experience.
How to Choose an Insurance Provider
If you want to get a good price for your insurance policy and get good coverage, you need to work with the right insurance provider. Keep these tips in mind when choosing a provider to find the best company for the job:
- Assess your risks to know what specific types of coverage you need
- Shop around (don’t just work with the first company you find online)
- Get quotes from multiple providers
- Compare and contrast to see who offers the best rates and the best coverage
- Read reviews online to see what current and past customers have to say
Be sure to reassess your insurance coverage every year, too. You might need a type of coverage in the future that you don’t need now, for example. It’s always good to reevaluate to ensure you aren’t leaving any gaps that could hurt your business later.
Get Insured Today
There’s a lot that business owners have to learn when it comes to insurance, from business insurance cost to choosing a great insurance company. If you follow the information laid out in this guide, though, it’ll be easier for you to make the right decisions for your business and your employees.
Do you want to further expand your business insurance and business management knowledge? If so, head to the Business section of our site today to access more helpful resources.