As a small business owner, you want to keep your company, property, and assets safe. The best way to do this is to purchase the right type and amount of insurance.
It can be overwhelming trying to decide which types of coverage your specific business will need, but that is why we are here to help.
You’ve likely worked very hard at building your business and need to protect yourself and your company from accidents, natural disasters, professional errors, theft, and worker’s compensation claims.
The best way to protect yourself from the unexpected is to do your research and prepare yourself for mishaps. We will go over the different coverage types and why your small business will benefit from adding them to your policy.
Where to start with insurance as a small business
The two most common and essential types of coverage are general liability and commercial property insurance.
These will protect you, your employees, and others who may be injured on your property. Your property, such as buildings and physical assets, will be covered as well.
With general liability, you will be protected financially, from the following:
- Bodily injury
- Medical expenses
- Property damage
- Settlement bonds or judgments
Commercial Property Insurance
You may want to include property insurance in your policy if your business is home-based, leases or owns buildings, contains a significant amount of property and physical assets.
This way, you will be protected in the case of a fire, natural disaster, burst pipes, storms, vandalism, or theft.
Examples of what may be covered include:
- Permanently installed fixtures
- Office supplies
Other common types of insurance for small business
Depending on the type of business you are running, you may want to look into the different coverage options available.
While it makes sense for all companies to have general liability, as someone could have an accident in your store or on your property, there are other incidents to consider.
Business Income & Extra Expense
If an incident such as a fire or storm occurs and your business must temporarily shut down, then this coverage will help you get back some of your lost income.
Business Auto Insurance
Business auto insurance will protect you, your employees, and your company vehicles. This coverage will pay for the damages of accidents that occur while a company vehicle is being driven or used.
Business Owners Policy (BOP)
An excellent choice for small businesses. BOP can save you money, as it combines general liability and property insurance. Rather than purchasing two separate coverages, you would only need to buy one.
Commercial Package Policies (CPP)
Similar to BOP, this policy includes general liability and property insurance. However, with this policy, you can customize it to meet your needs.
You may want to add:
- Business income insurance
- Business vehicle insurance
- Business crime insurance
- Commercial umbrella liability
- Electronic data processing coverage
- Equipment breakdown
- Employment practices liability
- Inland marine
- Pollution liability
If one of your employees becomes injured or sick from their job, workers compensation insurance can provide them with benefits and coverage.
Cyber Liability or Data Breach Insurance
It may be necessary for your business to accept digital payments, keep medical or financial data, and store confidential customer information.
When you add this to your policy, cyber liability will protect your company against computer-related crimes and losses, such as hacking and identity theft.
Which add-ons are beneficial in Michigan?
While a business owner’s policy (BOP) is an excellent place to start, especially for small businesses, there are a few add-ons you may want to consider.
Coverage for flooding is not included in a typical commercial property insurance policy. You will likely need this add-on if you live near the water or store important documents or assets in a basement.
Business interruption coverage
This coverage type may be more essential now than ever before, with the number of shut-downs that have taken place recently due to COVID-19.
If your business needs to close temporarily, business interruption coverage will help with lost net income, rent, loan payments, taxes, and employee payroll.
Electronic data processing insurance
If your business depends on EDP equipment, such as computers, adding this to your policy can be beneficial. In the case of a power surge, mechanical breakdown, virus attack, or fire, your equipment may be restored or replaced.
Why your small business needs insurance
As a business owner, you have put a lot of thought, time, labor, and money into your company. Building a great foundation is difficult, and getting a company up and running is a great accomplishment.
The last thing you want is to lose your profit and company over the unexpected.
Preparing for the worst may not be exciting, but it can save your company from financial losses and collapse. Getting your company the right type and amount of insurance coverage is one of the most important investments you’ll ever make.
How Frost & Remer can help
At Frost & Remer, we understand that each business is different and has its own unique needs.
If you need help deciding what type of coverage your business needs, we can offer you a free policy review and full risk assessment.
Schedule a virtual appointment to learn more about our discounts, Business Owner’s Policy, Surety Bonds, Commercial Auto Insurance, and Workers Compensation for your business.
Contact us today if you have any immediate questions and concerns about your existing policy or purchasing a new one.