FRIDAY, MARCH 26, 2021
Every day, hundreds of small businesses pop up around the globe and even more are in the conception or planning stages. Starting your own business from a restaurant to an online retailer is an exciting venture that can provide a lot of success—but it also provides a lot of risk.
If you plan on starting or just started a small business, you will need insurance. Business insurance can help protect your assets in case of an accident or lawsuit. In fact, most new businesses fail within the first five years due to money issues, which can be compounded by lawsuits or financial loss not covered under business insurance.
Ideally, you should have business insurance for your small business from the moment you are ready to open your doors to clients or customers.
What Qualifies as a Small Business?
The category of small business varies from industry to industry. A small business in one industry may be 100 employees while a small business in another industry may include over 1,000 employees. To qualify for business insurance, you may want to check with your state and industry guidelines to ensure that you get the right amount of insurance for your business.
Is Small Business Insurance Required?
Certain types of insurance may be required depending on your location and industry. While business insurance on its own is not typically required by state or federal law, you may need certain insurance policies in order to obtain licenses. You may typically need insurance before obtaining such licenses. If you plan on manufacturing or selling alcohol, for example, you will likely need liquor liability insurance before obtaining a liquor selling license.
What Does Small Business Insurance Cover?
Small business insurance is a broad term for a range of coverages available for certain companies. Many small businesses benefit from a business owners policy (BOP). A business owners policy combines two main coverages:
General Liability Insurance: General liability insurance covers bodily injury, property damage and personal or advertising injury claims filed by third parties against your business. If someone is injured on your business’ property, for example, general liability insurance can cover their medical bills as well as protect your business against lawsuit-related expenses.
Commercial Property Insurance: Commercial property insurance covers the physical property of the business and its contents in case they are destroyed or damaged due to fire, wind, hail, lightning, smoke, theft, vandalism, explosions and more. This insurance also often includes business interruption insurance, which covers expenses if your business is unable to operate after a disaster.
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It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional
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