Navigating Small Business Insurance
Choosing insurance for a small business can be a daunting task. There are insurance products for virtually every kind of risk. An agent can help you sort out which policies meet your business needs and which situations are excluded on each policy.
Types of Insurance for Small Businesses
General Liability
One of the most comprehensive insurance types for a small business is general liability. General liability is a third party insurance, meaning it protects your client or other third parties from damage or injuries caused by you. It offers coverage in a number of different areas:
Property Damage kicks in when you damage the property of a third party. For example, you’re a roofer doing work at a client’s home, and a package of shingles falls off the roof and damages your client’s outdoor furniture. That damage would be covered by your general liability.
Bodily Injury happens when a third party is harmed at your business office or work site. For example, a customer comes to your office and slips and falls. That injury will be covered by your general liability.
Personal Injury comes into play when you slander a third party. For example, you bad mouth a competitor, and that person finds out and sues you. Your general liability will pay your legal expenses.
Copyright Infringement takes place when a competitor sues you for utilizing his advertising. For example, you go to your competitors website, and you like his advertising and decide to model your advertising after your competitor’s.
Workers Compensation
Workers compensation is a generally must-have insurance for small businesses. In most states, workers compensation is required by law. Often you will find this type of policy bundled with general liability.
It pays for the medical expenses, rehabilitation and lost wages for your injured workers. It does not, however, pay for injuries sustained outside the workplace and not related to the job.
Business Owner Policy (BOP)
A Business Owner Policy, or BOP, is a comprehensive insurance option for small businesses, combining several types of essential coverage into one convenient package. BOP typically includes general liability insurance, which protects against third-party claims for property damage and bodily injury. In addition to covering injuries or damages to owners, BOP also often offers business interruption insurance, which can help cover lost income and operating expenses if a covered event forces you to temporarily close.
BOP is particularly valuable for small businesses as it consolidates multiple coverages into one policy, often at a lower premium than purchasing separate coverages individually. While BOP does not typically include professional liability, auto insurance, or workers’ compensation, it serves as a solid foundation for many small business insurance needs.
Professional Liability Insurance
Often paired with BOP is professional liability. This type of insurance protects you from claims of negligence in providing your service. According to the Small Business Administration:
“Business owners providing services should consider having professional liability insurance (also known as errors and omissions insurance). This type of liability coverage protects your business against malpractice, errors, and negligence in provision of services to your customers. Depending on your profession, you may be required by your state government to carry such a policy.”
ACI Can Help You with All Small Business Insurance Needs
Navigating insurance options can feel overwhelming for small business owners, but selecting the right coverage provides vital protection for your people, property, and business. From general liability and workers’ compensation to a comprehensive BOP and professional liability, these policies ensure you’re prepared for potential risks while keeping your focus on growing your business. Consulting with a licensed agent at Affordable Contractors Insurance can help you tailor your coverage to meet your unique needs, giving you peace of mind and confidence as you build your company. Contact us for a quote today!
