Small business owners have a lot on their plates. Daily operations include managing employees, selling products, and ensuring everything is financially sound. Then there’s the long-term aspect, taking daily steps that will lead to a stronger future for the company. After doing all this work, you don’t want to lose everything because of some accident or unexpected event. This is where small business insurance comes in.

Benefits of Small Business Insurance

Small business insurance protects your business against financial losses in the event of an accident, natural disaster, or lawsuit. It not only gives business owners peace of mind knowing that they have financial protection, but different types of insurance are often legally required, depending on where you live. By getting the right types of business insurance, you can recover more quickly from an unforeseen event and maintain business stability.

General Liability

The most common type of small business insurance is general liability insurance. General liability insurance protects your business from claims involving bodily injury, property damage, or personal injury caused to others. For example, general liability coverage will handle the associated costs if a customer slips and falls on your property. Your small business will definitely want general liability insurance if it interacts with clients, vendors, or the public, as it covers legal fees, medical expenses, settlements, and more. 

Professional Liability

Next, there’s professional liability insurance, also known as errors and omissions insurance. This type of insurance protects your business from negligence, mistakes, or inadequate work claims. If a client claims your advice or service resulted in them experiencing financial loss, your professional liability insurance will cover the associated legal fees and settlements. Common types of professionals who rely on this coverage include consultants, accountants, and designers.

Business Owner’s Policy

A Business Owner’s Policy is a combination of general liability coverage and property insurance. It covers property damage, liability claims, and business interruptions. For example, if you have a fire at your workplace, the BOP can cover the costs of repairs and the lost income during downtime. Combining general liability and property insurance into one package typically makes it a more affordable plan, which is ideal for small and medium-sized businesses.

Workers Compensation

If an employee is injured on the job, workers’ compensation insurance will cover medical expenses, lost wages, and rehabilitation costs. Most states require businesses to have some form of workers’ compensation insurance if they have employees. For example, in South Carolina, businesses with at least four employees must have coverage. 

Short-Term Liability

With short-term liability coverage, you’ll have coverage for specific events or time periods. For example, if your business decides to open a pop-up shop for the holidays, you would get short-term liability insurance to protect this short-term operation. Short-term liability insurance is most commonly used by freelancers, event organizers, and seasonal businesses who don’t need coverage for the entire year. It’s a more flexible and affordable option for businesses that only have temporary insurance needs and don’t want to commit to a long-term policy.

Cyber Security

Cyber security insurance is growing increasingly popular as the number of cyber attacks each year continues to grow. With cyber security insurance, your business will have protection in the event of a cyberattack, data breach, or system failure. For example, if hackers steal customer information from your database, cyber security insurance can help mitigate the financial and reputational damage. As cyberattacks are increasingly targeted toward small businesses, this coverage has become even more essential for small business owners who want to ensure business continuity and compliance with data protection laws.

Medical Malpractice

Finally, the last major type of business insurance to explore is medical malpractice insurance. Medical malpractice insurance is designed for healthcare professionals, covering things like claims of negligence or mistakes leading to patient harm. For example, a doctor would have medical malpractice insurance in the event that a patient sues them for an incorrect diagnosis or treatment. Lawsuits like this can result in significant financial penalties, making this insurance all the more important for healthcare professionals with small practices.

Other Types of Small Business Insurance Coverage

As a small business owner, there are a few other types of business insurance you may want to explore, depending on your specific needs. For example, there’s product liability insurance, which covers claims that your product resulted in injury, illness, or property damage. Or, if your business has company vehicles, you’ll want to explore commercial auto insurance. Then, there are insurance policies that cater to niche industries, such as inland marine insurance, which protects goods transported over land. If you’re unsure of which types of insurance your business needs, it’s best to speak to an insurance agent who can guide you in the right direction.