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It takes guts to launch your own business. Especially when you consider that every year, thousands of new small businesses launch in the United States — and every year, thousands fail. Not that we’re trying to psych you out!! We know that you’re going to be one of the successful ones — especially because you’re protecting your business with insurance. Right? Right. That’s why you’re here.
In this article, we’ll cover the types of insurance your business might need. That way, you can spend less time worrying about potential risks, and more time growing your incredible company. We believe in you!
There are a number of common types of business insurance policies you may want to consider purchasing for your small business. Just remember that insurance is customizable, so you may also want to discuss your needs with an agent to make sure that your business is getting all the coverage it needs.
General liability insurance protects your company if someone is injured or sustains property damage from doing business with you. For example, if a customer slips and falls on a wet bathroom floor in your store, your general liability coverage will pay for their lost wages, medical expenses, and pain and suffering. Or if your head landscaper accidentally puts his hedge clippers through a customer’s window, your policy will pay to replace it.
On another note: You might want product liability insurance if you sell physical goods. That way, you're covered if a customer sustains an injury or property damage directly from using your product. For example, let’s say you sold a cell phone charger that overheated and caught fire. Product liability insurance would pay for any related medical bills and repairs to the customer’s home.
Commercial umbrella insurance supplements your general liability, employer’s liability, and commercial auto coverage. So if you reach your policy’s limit, your umbrella insurance will kick in to cover any remaining balance on the claim. That way, you won’t have to dip into your business (or personal) assets to pay for any issues.
Did you know: You can also get a personal umbrella insurance policy that provides additional coverage for your homeowners and car insurance.
Commercial property insurance (sometimes known as business hazard insurance or business property insurance or business hazard insurance (dang, that’s a lot of names!)) protects the building your business operates from and its contents. And if you’ve got more than one, it’ll protect ‘em all.
If your property sustains damage due to a fire, blizzard, windstorm, act of vandalism, or another covered hazard, the policy will kick in to repair or replace your building, as well as your:
Depending on your policy details, you may also receive a business interruption benefit if the covered hazard forces you to close your doors temporarily.
If you have employees, you probably need workers' compensation insurance, commonly referred to as workers’ comp. This policy covers your staff if they sustain a work-related injury or illness. If that happens, it will pay for associated medical treatment, plus a percentage of any lost wages. Requirements vary by state, so you should speak with an insurance agent in your area to make sure you have adequate coverage.
Pro Tip: You may also want to purchase employment practices liability insurance. That way, your business is protected should one of your employees sue for harassment, discrimination, or wrongful termination.
If your company can’t operate because of a natural disaster or other covered hazard, you lose money each day you’re closed — and if it goes on long enough, it could even end up putting your whole business at risk. Business income insurance (or business interruption insurance) pays out a cash benefit to replace lost income.
Cyber liability insurance covers costs associated with a data breach. If you store sensitive data such as credit card information or social security numbers on your company server, you should consider purchasing a cyber liability insurance policy. Let’s say someone hacked into your company’s database and stole the credit card numbers of your customers. Your insurance policy would pay to inform the impacted customers and offer them credit or identity theft monitoring services. They might even help you run a public relations campaign to smooth things over.
Pro Tip: If you bring your work home with you, you should also take steps to improve your cybersecurity at home — since cyber risks are increasingly common wherever you are.
Commercial auto insurance is a must if you or any of your employees drive a vehicle for business purposes. Like your personal car insurance, it will pay for bodily injury and property damage caused by an accident.
Professional liability insurance protects you if you make a mistake on the job. Which is good to know, since we all have bad days! Also known as errors and omissions insurance, this policy type covers negligence and malpractice. Say, for example, you’re an independent attorney who owns a law firm, and you give your client advice that results in financial loss. A professional liability policy will pay for your client’s damages.
If your business has an extensive leadership team, you may also want to consider directors' and officers' (D&O) insurance. The policy will protect them if they get named in a lawsuit.
Your business insurance needs will depend primarily on the amount of risk involved in your work, what assets you want to protect, and what’s required by law. Some of that may seem pretty cut and dry, but you may still want outside advice.
Keep in mind that the riskier the business, the more insurance you need. Likewise, the bigger the business, the more insurance. And just because you work from home, doesn’t mean you can skip out on purchasing coverage, since a homeowner or renters policy won’t be adequate.
Pro Tip: If you want a convenient way to get a solid business insurance foundation quickly and affordably, ask your insurance company about a business owner’s policy (BOP). A BOP is an insurance package that includes business income, general liability, and commercial property coverage.
When you own a business, a lot can go wrong. However, having the right coverage in place can give you the peace of mind to focus on growing your business. And we’ll be here cheering you on!
And when you’re ready to shop for insurance, you can compare options, purchase insurance, and manage your various policies from your Marble account. Get started today, and you’ll even earn rewards on your insurance!
