Business Insurance For Small Businesses Whether you’re a new business or a longtime establishment, unexpected events can put your company at financial risk. Business insurance helps small businesses manage those risks and thrive.
Different policies cover specific types of risk, so it’s important to find the right mix for your company. Here are some of the key types:
Business Owners Policy (BOP) A business owners policy (BOP) is a commercial package insurance offering that bundles property and general liability coverage in one easy-to-manage policy. It’s typically sold to small and medium-sized businesses.
The property portion of a BOP covers damage to company buildings and their contents, like furniture, inventory and equipment. It also covers repair costs for items that were stolen or damaged during a covered disaster. A BOP often includes additional coverages, such as business interruption insurance and hired and non-owned auto liability.
However, it’s important to note that not all business risks are covered by a BOP. In fact, you may need to purchase other types of business insurance, such as workers’ compensation and a commercial auto policy. If you want a more efficient way to buy these policies, consider working with an online business insurance broker, like Next. It allows you to compare multiple quotes and purchase all your business insurance in a single digital experience.
Commercial General Liability (CGL) If you have a customer-facing business, you need commercial general liability insurance (CGL). This is the umbrella policy that covers your company in cases of non-professional negligence that result in property damage or bodily injury. It’s important for small brick-and-mortar businesses, as you never know when someone might slip on a stair or have their hand cut by a sharp tool.
CGL policies typically include premises liability, product liability, and completed operations coverage. Premises liability protects your company if customers get hurt at your physical location, for example, if they trip over merchandise or are injured by a sprinkler system. Product liability protects your company if the products you sell or work on cause damage to people or their property, and completed operations coverage helps pay for any bodily injuries or property damage that occur as a result of a finished job done by your company.
Most companies choose a claims-made policy, which offers protection for incidents that happened during the time the policy was active. However, you can also buy an occurrence policy.
Commercial Auto Insurance Whether it’s an Uber, Lyft or taxi, companies that transport passengers need commercial auto insurance. It’s more than just a regular auto policy as it also includes liability coverage.
It is often required by states to cover bodily injuries and property damage that may occur in an accident caused by a vehicle owned, leased or borrowed by your business. It can also include personal injury/medical payments coverage, which pays reasonable and necessary medical or funeral expenses for those who are injured in an accident caused by a vehicle driven by you or your employees.
Most commercial auto policies include collision and comprehensive coverage. Collision covers the cost to repair your insured business vehicle after an accident. Comprehensive covers non-collision related damages such as fire, flooding, hail and vandalism. This type of protection is usually limited to a specific number of days per year, but can be extended for an additional fee. It is also possible to add hired and non-owned auto coverage, which provides insurance for vehicles that your employees drive on the job but don’t own, lease or borrow.
Workers’ Compensation Workers’ compensation is a type of business insurance that pays for medical bills and some portion of lost income when an employee is hurt or killed on the job. It is usually mandatory in most states for employers to carry. Personal health insurance may not cover work-related accidents and injuries, so having this policy is important. Self-employed individuals and sole proprietors are not typically required to carry this coverage but may buy it to fulfill a contract or to protect themselves from catastrophic out-of-pocket financial obligations.
Each state has its own rules and regulations about when businesses must carry this coverage. In general, however, a workers’ comp policy will pay for an employee’s medical expenses, some part of their lost wages, and funeral costs in the event of a work-related accident or illness. The cost of the policy is based on the payroll of the insured employer and on industry classifications and occupational codes. A deductible is sometimes included in the policy as a way to lower the premium.assurance entreprise