When you start a business, you think about customers, sales and growth. Insurance is usually not the first thing on your mind. But one bad event, like a fire, a lawsuit or an injured customer, can end a young company. That’s why small business insurance matters.
What is business insurance
Business insurance is a set of policies that protect your company from financial loss. Different policies cover different risks.
Main types of business insurance
General liability insurance
This covers claims that your business caused injury or damage to someone else. For example, a customer slips in your shop and gets hurt. It’s the most common policy for small businesses.
Property insurance
This covers your building, equipment, stock and furniture against events like fire, theft or storms. If you work from home, your home policy may not cover business items, so check.
Professional liability insurance
Also called errors and omissions insurance. It protects service providers like consultants, designers or accountants if a client says your advice or work caused them a loss.
Workers’ compensation
If you have employees, this covers medical costs and lost wages when they get hurt or sick because of work. In many places, it’s required by law.
Business interruption insurance
If you can’t operate after a covered event, like a fire, this helps replace lost income and pay ongoing costs like rent.
Commercial auto insurance
If you use a vehicle for business, a personal car policy may not be enough.
Cyber insurance
Covers costs from data breaches and online attacks. Important if you store customer data or sell online.
How to decide what you need
- List your biggest risks
- Check what the law requires in your area
- Look at your contracts, since some clients ask for proof of insurance
- Think about what loss would hurt you the most
Tips for buying
- Talk to a licensed agent or broker
- Compare quotes from several companies
- Ask about bundle packages
- Read exclusions carefully
- Review your cover each year as your business grows
Final thoughts
You can’t remove every risk, but you can protect yourself from the ones that could shut you down. Start with the basics, and add more cover as your business grows.
