Business insurance helps protect your business from the potential adverse events that might impact your employees, clients, or physical location.
While small business owners may be hesitant to pay for the right amount of insurance, understand that it actually saves money in the long run if, and when, an unexpected struggle arises.
Furthermore, your median cost may be lower than you think as policy pricing depends on the type of business you own, the insurance coverages you need for your business operations, and the insurance company you select.
Keep reading for an overview on the types of insurance and who to call to better learn what fits your needs.
Stay Covered: Types of Insurance
When beginning the insurance hunt, you will receive insurance quotes for various types of insurance that may or may not apply to your specific business. As such, it is important to understand the differences between various types of insurance your business may need.
Below is a quick list of some of the most common.
Commercial Property Insurance
This type of insurance protects your business property and assets within it from damage or theft. Any time you own an office space or expensive equipment, this type of insurance becomes a necessary safeguard against unforeseen mishaps.
General Liability Insurance
General Liability Insurance is made to cover any physical harm or property damage that might affect third parties. This type of insurance is especially important if your business requires you or employees to interact with the property of others.
Limited Liability Insurance
Limited liability insurance protects your personal assets from business related claims. This is because when you own a business, the line between company and personal assets can be blurred.
If you ever find yourself embroiled in business litigation, having limited liability insurance can help save your assets from being placed under attack.
Professional Liability Insurance
Professional liability insurance safeguards against negligence claims brought on by your clients. Depending on your business, professional liability insurance will go by more specific names such as legal malpractice insurance.
Errors and Omissions
For businesses that offer highly technical services such as engineering or architecture, having insurance to cover errors and omissions is crucial. Because the nature of the work is so highly specialized, this type of insurance acts as a safety net should a detail get overlooked in the course of completing a project.
One of the most well known types of insurance, workers compensation is built to cover the medical expenses of employees who are injured on the job. For industries that utilize manual labor, this type of insurance is a must-have– giving both you and your employee access to necessary resources should an injury occur.
Commercial Umbrella Insurance
Umbrella insurance provides additional coverage to your existing policies. Serving as an overflow should a given expense not be completely covered under another policy, umbrella plans should always cover a higher dollar amount and a larger scope of damages than all other policies.
Determining the Cost of Coverage
Finding the right combination of insurance packages is only half the process– making it affordable is the next. Determining what you can expect to pay in annual premiums and deductibles are the main factors in determining whether a given policy bundle will be a feasible expense in the long run of your business.
Some of the largest influences on your annual premiums are your industry’s associated risk, your geographic location, provider, number of employees, years in business, and any previously lost insurance claims.
For instance, Businesses which deal with greater levels of liability to either their customers or their workers are going to experience higher insurance costs than businesses that are lower risk.
High-risk fields such as construction will result in higher premiums due to the nature of the work itself– injuries to workers and damage to personal property being unfortunate, though not uncommon, occurrences. Likewise, having lost insurance claims in the past or being a relatively new business could cause you to pay a higher premium.
The above factors will also contribute to your deductible. Your deductible is the amount of out-of-pocket costs you will be responsible for under your policy should a claim be filed against you. Deductibles are most commonly fixed-rate.