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Insurance Needs for Small Businesses

Updated 12:21 PM EST, Mon November 12, 2018

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What Insurance Do I Need for a Small Business?

Business insurance is one of the most important choices you can make for your small business. Many small business owners, especially those just starting out, only see business insurance as an expense. Often, owners feel the same way about insurance as they do taxes. Some forms of business insurance are mandatory, and many small business owners begrudgingly buy only the minimum amount. Consider that small business insurance is more like an investment in helping make sure your company will succeed even through the toughest challenges.
Accidents and legal claims are commonplace for today’s small businesses. Without business insurance, a small firm and its owners could potentially be on the hook for hundreds of thousands, possibly millions, of dollars in damage and liability claims. Few small businesses can recover from such costs. The right small business coverage can help pay the costs of these damages and claims.
That’s why it’s important to see small business insurance not as an expense but as an important strategic investment in protecting your company and your own assets. Imagine the instant peace of mind you’ll feel knowing that your small business is ready to prevail through property damage, liability claims and loss of income.
Your small business insurance might also give you access to risk assessments, cyber security consultations and other support benefits. These could help you run a more efficient and safer business. In the long term, your investment in small business insurance could really show returns if disaster strikes. For example, something as simple as a leaky pipe that causes an inch of water in an office can result in tens of thousands of dollars in damage. For covered losses, small business insurance can help cover the costs to repair and replace damaged business property. This way your personal and business finances don’t take the hit and your business is able to continue for the long haul.

Do I Need Liability Insurance for My Small Business?

Yes, you most likely need liability insurance for your small business. There are several different types of liability insurance, the most common of which are General Liability and Professional Liability. General Liability helps cover the costs of claims if your business is responsible for another’s personal injury or property damage. Professional Liability helps cover the costs to resolve a claim that damages were suffered due to errors or omissions in the services or goods your business provided.
For example, your accounting firm could make an error in a client’s financial statement that’s ends up costing your client a lot of money. If your client files a claim, Professional Liability insurance could help cover the costs to resolve the claim. Or imagine a customer slips and falls on a wet floor in your store, they could make a claim against your company for medical expenses and pain and suffering. General Liability Insurance can help cover the costs of this claim. Another example would be if your business damages someone else’s property. In this case, General Liability can help cover the costs of the claim or repairs to the damaged property.

What Does Small Business Insurance Cover?

There are almost too many reasons to talk about for why small businesses need insurance. However, the main reason is that small businesses are susceptible to property damage, liability claims and loss of income. Small business insurance can help cover the costs of these losses. If your business is damaged by a covered accident such as a hurricane, small business insurance can help cover the costs to repair the damage and replace lost business property and income.
If a claim is made against your business by someone who gets injured on your business property, or your business accidentally damages someone else’s property, business insurance can help cover these costs. Also, small business insurance can help cover lost income if you must shut down temporarily because of a covered event.
Specific coverages:
  • Business Income Coverage. This helps cover lost income if your business is unable to operate due to a covered incident. For example, if a storm knocks out the power to your store and you’re unable to open for three days, business income coverage can help replace the income your business missed over those three days.
  • Commercial Property Insurance. This helps cover the costs of damage to your own business property from a covered event. This includes the physical location of your business, furniture, tools, equipment and other physical assets.
  • Workers’ Compensation Insurance. This provides benefits to employees who become injured or ill on the job. In the unfortunate event that an employee dies from a work related injury or illness, Workers’ Comp Insurance can pay benefits to the employee’s family. For businesses with employees, this coverage is mandatory in most states.
  • Commercial Auto Insurance. This helps cover the costs of auto accidents you or your employees are involved in while driving for work purposes. If you or your employees drive for work purposes, this coverage is mandatory in most states.
  • Data Breach Insurance. This helps cover the costs associated with a data breach at your small business. This can include costs to alert customers, employees and vendors whose data was compromised, for goodwill PR, and for breach mitigation measures.

What Are the Benefits of Package Coverage?

The benefits of buying insurance packages include convenience and cost savings. Often, insurance companies will bundle coverages that are regularly purchased together by specific business segments. Typically the coverages are bundled into a single policy. This can be more convenient for a business than having to manage multiple separate policies. It means that you only have to manage one policy, and pay one bill, even though you are getting multiple coverages. These insurance packages are often priced at a discount compared to if the coverages they contain were each purchased separately.

What Is a Business Owners Policy (BOP)?

business owner’s policy (BOP) is one of the most popular coverage packages. It combines General Liability, Property Insurance and Business Income Insurance. At a minimum, most businesses want these three primary coverages which form the foundation of a comprehensive coverage solution. Business owners can often save money and time by getting these three coverages in a BOP. Invest in protecting your company. Go online and get a quote today.

Certain coverages vary by state and may not be available to all businesses. All Hartford coverages and services described on this page may be offered by one or more of the property and casualty insurance company subsidiaries of The Hartford Financial Services Group, Inc. In TX, this insurance is written by Sentinel Insurance Company, Ltd., Hartford Casualty Insurance Company, Hartford Lloyd’s Insurance Company, Property and Casualty Insurance Company of Hartford, Hartford Underwriters Insurance Company, Twin City Fire Insurance Company, Hartford Accident and Indemnity Company and Hartford Fire Insurance Company. In CA by Sentinel Insurance Company, Ltd. (CA license # 8701) and its property and casualty insurance company affiliates, One Hartford Plaza, Hartford, CT 06155.
The Hartford® is The Hartford Financial Services Group, Inc. and its property and casualty subsidiaries, including issuing company, Hartford Fire Insurance Company. Its headquarters is in Hartford, CT.