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Top pick: Embroker
Our editorial team has spent hundreds of hours analyzing business insurance options, sifting through the policy language and fine print to break down coverage details. Compare your business insurance options. and get quotes to find the right policy matched to your company.
Accidents can happen, and any business runs the risk of losing its reputation, cash flow and ability to survive if disaster strikes.
If an employee makes a mistake or a customer slips on your property, you could be liable for costs or get sued. Let’s say you’re a plumber and you incorrectly fix a pipe for a restaurant, which forces it to stop operating for a month. You could be forced to pay out what the restaurant would have earned in that time.
This is why business insurance exists. It offers protection for a range of things like getting sued and much more. If you don’t have insurance, you might have to pay for damages out of your own personal finances.
Someone slips in your retail shop and sues you for medical bills.
You own a car wash and one of your employees spills a chemical inside a car.
You accidentally sell fruit contaminated with E. coli and your customers get sick.
You provide a client with a flawed building design that needs repairs after it’s built.
Your company breaches safety or industry regulations and has to pay fines.
Your business faces a theft, fire, storm damage or other disaster.
Insurance type | Businesses that need this | What’s covered |
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Product liability insurance |
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General liability insurance |
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Professional liability insurance |
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Consider adding additional types of coverage based on the type of business you run.
Like most insurance quotes, it depends on circumstance. The amount you pay for coverage depends on what type of business you’re running, how many people you employ and what risks you run. If you’re running a light team of four or five librarians, your insurance will cost less than if you have 50 architects planning homes across the country.
Consider the following scenarios when you might need business insurance.
You’ve worked hard to get where you are. Maybe you built your business from the ground up or you’ve taken it and turned it into something to be proud of. So why risk it? No matter how careful you are, accidents happen, mistakes get made and people file complaints out of anger or spite. Without insurance, one bad situation can put you out of business for good.
What would you do if someone got really sick or a worker was injured on your site? How would you cope if a flood ruined your building or a thief made off with thousands of dollars of stock or private data? These are important questions you’ll need to answer.
Here are a few situations where business insurance just might save you:
A patient who sought advice from one of your doctors concerning a medical procedure files a legal complaint against you when the procedure goes poorly. Even though the doctor’s advice was sound and the procedure was botched by someone else, you’re still on the line for thousands of dollars in legal fees to settle it, which insurance can cover.
One of your waiters trips and spills boiling hot soup on a customer. Business insurance can help you with medical bills for the injured person and cover any possible legal fees that you otherwise could face.
Despite the extensive security measures you’ve invested in, a thief manages to break in and get away with thousands of dollars worth of jewelry. Without business insurance, you’d either have to accept the loss of whatever unique and pricey pieces the thief got away with or pay to replace it out of your own pocket.
Determine the most likely issues to come up and which would be most damaging without insurance. If you have employees, what would happen if they were dishonest or got injured? Do you have a product or service people might be unhappy with? How vulnerable are you to theft or disasters?
Once you’ve figured out the risks, you can pick a policy. You may need only one type of coverage or you may need to pick and choose coverage areas to build your perfect policy.
Read the fine print on the policy you’re taking out. Are you covered for the worst situations? Is your insurance limit high enough to cover your most valuable assets if they get damaged or stolen?
Every insurer places caveats on claims. These are situations and circumstances where they won’t acknowledge a claim. Investigate these carefully before taking out a policy.
Using an insurance broker to choose the best policy for you can save you money overall. Finding the perfect policy can take a long time and can cause a ton of stress. Even after all this, you might end up with an inadequate or an over-the-top policy. Insurance brokers can walk you through the process, assess the biggest risks your business is likely to face and choose the best policy for you.
If you run a small business, you likely don’t have to worry about many of the same problems that a much larger business would face. But this doesn’t mean that you’re home free. Small businesses have a number of unique risks that a larger company doesn’t.
Smaller companies rely on these factors to stay in business, and insurance could help minimze riss if any of these factors are compromised.
Yes, most states require small businesses to take out worker’s compensation insurance, though specific laws vary by state. Other types of insurance, while not legally mandated, are highly recommended.
It depends on what’s causing your drop in business. Risks such as an economic recession where demand for your product or services may fall or a close competitor infiltrating your market are not covered by business insurance. But business interruption insurance can cover revenue lost after an unpredictable disaster like a fire or flood.
Business interruption insurance covers a business for the loss of revenue that it suffers following an unforeseen event. This means that while the business is being repaired, cash will be provided to account for the loss of revenue but not for personal income.
Check to make sure that the limit in your policy is high enough to cover your business if it shuts down for an extended period of time. Building fires and floods can shut a business down for months or even years.
Most insurers will let you make a claim online or over the phone, though the process can vary between providers. In most cases, you will need to supply proof of ownership or legal responsibility and as many details as you can about your claim.
Possibly, but it depends on your situation.
Commercial insurance brokers have a wealth of experience and an in-depth understanding of the business insurance market. They know which policies are available and which ones will be right for you.But you could save money by purchasing a business policy yourself.
If your business faces unusually high risks or has complicated insurance needs, use a broker to make sure you’re fully covered. If you know exactly what you’re looking for, save yourself some money by purchasing a policy yourself.
Like any insurance policy, it’s equally important to know when you won’t be covered. You can avoid losing out by checking the exact details of your policy, but there are a few that most policies won’t cover. You’ll probably lose out if your claim involves the following:
You can purchase cover directly from the insurance brand or with the help of an insurance adviser or broker. A business insurance adviser will help you compare the different options available and assess your business risks to find an option that’s suitable for you.
This depends on how your business is set up. If you employ people, you may be legally required to take out workers’ compensation insurance to protect your employees. If you own a vehicle, you’ll also likely need commercial auto insurance.
Depending on the risks your business faces, you may want to take out other forms of insurance to protect yourself from liability and financial setbacks.
Nearly every business can benefit from having some form of insurance coverage in place. It offers financial protection against a large number of common risks, giving you peace of mind that your business will be able to survive if something goes wrong.
General liability insurance provides cover for breaches of your general responsibility to the public, such as when a customer slips and injures themselves in your store. Professional liability insurance covers breaches of your professional duty and acts of negligence, such as an architect’s error when designing a house.
If you regularly deal with the general public or have customers and clients visit your business premises, you may need liability protection.
Factors such as the type of coverage you apply for, the size of your business, where it is located, the type of business you run and your claims history can all have an influence on your insurance premiums.
Enlist the services of a qualified insurance broker. A broker has experience and knowledge of the insurance market and can match your business with a policy that meets all your insurance needs.
Yes, according to the IRS, you can deduct your insurance premiums as a business expense.
Dawn Daniels is a publisher with Finder, based out of Oregon. Her background includes editing more than 40 published books, including Financial Fitness: 21 Easy Exercises to Get Your Personal Finances in Shape Fast by Dr. Vi Scott. In her spare time, Dawn enjoys hiking ridiculous distances and collapsing in exhaustion.
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