There’s no need to become an expert in business insurance. You can accomplish two things by familiarizing yourself with the different types of insurance for small businesses.
- Choose the right coverage for your business by making informed decisions.
- Understanding how insurance can protect you will allow you to serve your clients with confidence and not worry about the unexpected.
Typical small business insurance coverage
You’ll require different types of insurance depending on your business, employees, customers, industry, and more. Here are the three most common types of business insurance.
General Liability Insurance
General Liability insurance, or “slip and fall” insurance, is the most popular insurance policy for new businesses. It is also known as “slip-and-fall” insurance and covers many risks.
General liability insurance provides financial protection if you are responsible for accidents and unexpected events at any business. It covers:
* Injuries caused to non-employees
You can’t be held responsible for damage to property that you don’t have ownership of
* Libel and slander accusations
Say, for example, that it is raining, and a customer slips and falls on your wet floor. The general liability insurance will help cover the medical costs of an injured person up to your policy limits. Your policy will determine the extent and amount of coverage.
Workers Compensation Insurance
Workers’ Comp is something you might already know if you have employees. Workers’ compensation insurance in most states is required by law, not just because business owners want to be fair to their employees.
Workers’ compensation policies protect both employers and employees, typically covering:
* Medical expenses
Loss of wages
* Benefits to a survivor in the event of a death
* Employer liability
Imagine, for example, that one of your employees twisted his back while reorganizing the stockroom in your store, and it didn’t get better. Workers’ compensation could cover the initial diagnosis of an employee, as well as ongoing treatment and physical therapies. Workers’ compensation protects the business owner from paying for their costs.
You can also purchase workers’ compensation insurance for yourself if you do not have any employees. Self-employed individuals, sole proprietors, and independent contractors often buy insurance to protect their finances or meet client contract requirements.
Commercial Property Insurance
Commercial Property Coverage protects your assets, such as your buildings, equipment, and inventories.
Commercial property insurance covers:
You can rent, own or use the following items: * Goods and gear
* The structure of the building itself, without regard to its contents
* Income interruptions for your business if you have to close down due to an event covered temporarily
* Equipment breakdowns and malfunctions
Imagine that a storm knocks down power to your restaurant’s freezers and refrigeration systems, destroying your food stock. Commercial property insurance with spoilage coverage will help pay for inventory replacement and cover any losses.
Let’s compare the differences between some of the common types of coverage for small businesses.
What is the difference between General Liability Insurance and Workers’ Compensation?
Understanding general liability and workers’ compensation is pretty simple. Workers’ compensation pays for medical costs and injuries to your employees, while public liability pays for damages to third parties or non-employees.
Worker’s compensation covers your employees or you for work-related injuries and medical treatment. Workers’ compensation does not cover claims from customers or vendors walking through your door.
On the other hand, general liability insurance can cover expenses in case a third party causing injury accuses your business. Customers, vendors, investors, or others may be involved, but you or an employee will not be covered.
What is the difference between Commercial Property and General Liability?
Both general liability and commercial properties cover property damage. Commercial property covers you, and public liability covers others.
Commercial property insurance protects your equipment, goods, and buildings – things that you own. If a nearby restaurant’s fire damages your property, the insurance company will help pay for repairs.
General liability, unlike commercial property insurance, only covers damages and injuries that your business could cause to others’ things. This coverage does not cover any damage to the property of your business. Imagine, for example, that one of your employees accidentally spills soup onto a designer handbag. Your general liability policy would cover cleaning or replacing the bag.
These two types of insurance are linked. These two types of insurance are often packaged together as a Business Owner’s Policy. A BOP offers both coverages cost-effectively and conveniently.
Business owners don’t need to worry about insurance.
Business insurance does not have to be complicated or intimidating. Keep your business needs in mind when searching for the best insurer.
* Do not hesitate to ask questions about your coverage.
It will help if you are looking for insurance that you can customize to meet your needs as a business and not the other way around.
* Assess how the insurance provider manages basic insurance processes, such as obtaining insurance quotes and certificates.
It would help if you also considered whether you are comfortable with the tools and processes of your provider. You may prefer to do things online but also like to talk to an agent. Or both, depending on the situation.