A slip and fall lawsuit costs about $20,000 to settle. Only 28% of businesses have a business owner’s policy that covers this situation.
Ask yourself what a $20,000 lawsuit would do to your stress level and business. Without the right insurance policy, you won’t get a good night’s sleep and your business might have to shut down.
Too many small business owners don’t know the types of small business insurance, leaving them underinsured. They’re left to pay for damages and business interruptions out of pocket.
You can’t afford to take that risk. Read on to discover the types of insurance to consider for protecting a business.
1. General Liability
It’s recommended that every business get a general liability policy. General liability policies cover your business if someone gets injured on your business property.
It also covers property damage that happened while working. This is important for movers and contractors in case they damage a client’s property in their work.
A general liability policy also covers copyright infringement and damages from advertising.
A general liability policy is the basis of your asset protection strategy. Asset protection is a way to protect your personal property in the event of a lawsuit.
2. Business Owner’s Policy
A business owner’s policy has two components. It contains a general liability policy and a property insurance policy bundled into one policy.
The property insurance component covers inventory and business property damage and losses due to theft, fire, and certain weather events.
It’s not likely that floods are covered. Read your policy carefully to see which events are covered and which ones aren’t.
3. Business Interruption
Business interruption insurance pays for losses suffered in fires and other covered events. It replaces your lost income for the time that your business needs to close to recover.
There is some confusion about this policy because it doesn’t cover situations like COVID-19 shutdowns. It usually covers physical damages that cause a shutdown.
Some business interruption policies are included in business owners’ policies. Check with your insurance company.
4. Cyber Insurance
Small businesses have more responsibilities over their client’s sensitive data. They have payment information, addresses, and sometimes health histories.
You’re responsible for keeping that data safe. About 61% of small businesses said they had a security breach in the last year.
Cyber insurance covers downtime, reputation costs, and regulatory fines, and lawsuit expenses. Cyber security policies get tailored for each business, depending on the size of the business and industry.
The Many Types of Small Business Insurance
Small business insurance should be at the top of your priority list when you’re starting a new business. You could end up in debt before you get your business off the ground.
You just learned some of the basic types of small business insurance. Check with your local insurance agent to get an assessment of business risks and how you can protect your business with the right policies.
Do you want more tips for new businesses? Visit the home page of this site for more helpful articles.
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