Small business insurance: Important considerations to protect your business

Let's take a quick look at why insurance insurance is so important for small business owners, what types of insurance coverage should you consider and how does the insurance buying process work.

Why is having small business insurance so important?

Typically, we think about insurance as coverage for a physical space or facility. And while that's correct, having small business insurance protects so much more. In many cases, having small business insurance is required by law, so be sure you’re in compliance with the correct insurance. Small business insurance can cover a variety of important areas:

• Owners
• Employees
• Customers
• Physical space/equipment
• Company vehicles
• Personal data
• Legal liability

What type of insurance should small business owners consider?

Getting the right insurance for your business depends largely on the type of business you operate. Your insurance needs will differ greatly if you own an online e-commerce business versus a landscaping company or a real estate office. We’ve provided a good starting point here, but we suggest you consult with your insurance provider.

• Property: The first insurance that most consider is protecting their tangible assets—property they own or lease. This could be a building, equipment, products you manufacture, tools, etc. What many do not realize is this type of policy can also provide reimbursement for lost business income during a covered loss. Your insurance could pay for income loss suffered during a closure and provide assistance with expenses such as equipment leases and payroll.
• Liability: This type of insurance can come in many different shapes and sizes. Coverage includes protection against property damage or bodily injury whether it’s your employees, vendors or customers. You should also consider your risk while operating a vehicle, whether commercially owned or having an employee use their personal vehicle during the workday. You can also extend your liability limits by obtaining a commercial umbrella policy.
• Workers’ compensation: This type of insurance is required by law and is very important to have when it comes to work-related injuries. The policy not only provides coverage for the employee’s medical costs, but also reimburses for lost wages. Many carriers offer a “pay as you go” option, which means the premium can be calculated and paid during each of your pay periods—offering a huge benefit to cash flow management.

How can you make the insurance-buying process easier?

It’s important for your insurance partner to fully understand your business operations in order to adequately recommend coverage. You may have to go through an application process that includes providing key information about your annual sales, payrolls, property details, geographic scope, and more. When it comes to purchasing, review your options and consult with a trusted resource.

• Get multiple quotes: Make sure you get quotes from a variety of dependable insurance carriers. When you work with an insurance broker like McGriff, the broker will handle getting comparison rates and then review the options with you.
• Review payment options: Consider more than just insurance rates; make sure you consider the best protection for your business.
• Pick a policy that grows with you: Think about how quickly your business might grow in one year.
• Understand claims reporting: Understanding the proper way to file your business insurance claim can help you recoup your money quicker.
• Stay current with policy changes: Take a proactive approach to staying abreast of policy updates through trade publications and online forums.

Be sure to work with an insurance provider who understands your needs.

Most insurance companies have areas dedicated to assisting the small business owner. They understand you may wear many hats and are willing to provide risk management resources at no additional charge. It’s also common for providers to offer broader policies to include multiple coverages to help ensure your needs are met. What’s important is that you feel like your needs are being met—that includes the price for coverage and the overall customer service you receive.

Here are three questions to ask yourself:

• Does the insurance professional know my business/industry well?
• Do they offer the right amount/type of customer interaction?
• Do they listen to my needs to determine the right coverage?

Having the right policy and the right people in your corner can help make a difference as your business evolves and grows.