How to Deal With Small Business Insurance

Two Methods:Understanding Types of Small Business InsuranceChoosing the Best Insurance for your Small Business

Making sure your small business is protected against every possible risk is important to your financial security. If you have an insurance agent or broker, talk about the different types of insurance that are available, and ask for recommendations on which policies might be appropriate for your type of business. Many states also have requirements about what types of insurance must be in place for your small business to operate. Deal with small business insurance by assessing the different types that are available, and putting together an insurance plan that will keep your business covered.

Method 1
Understanding Types of Small Business Insurance

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    Purchase general liability insurance to cover any kind of incident that might happen; including accidents, negligence, libel and slander.
    • Make sure general liability insurance policies include coverage for medical payments, legal fees, property damage, lawsuits and settlements. For example, if someone slips and falls in your office, a general liability policy should cover medical bills as well as any lawsuits that are brought against you.
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    Use product liability insurance if your small business produces, manufactures, distributes or sells a product that people will buy and use. You will be liable for the safety of that product, so coverage is necessary in case it causes harm.
    • Consider the amount of injury your product could potentially cause. For example, a small business that makes lawn chemicals has a higher level of risk than a small business that sells socks.
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    Protect your business with professional liability insurance. This is also called errors and omissions insurance, and can protect you against claims of negligence, malpractice and other errors.
    • Check into whether you are required by your state government to carry this insurance. For example, many states require malpractice insurance for doctors and other healthcare providers.
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    Review commercial property insurance options. This type of insurance will cover loss and damage to your property from fire, theft, storms and vandalism.
    • Explore which type of commercial property insurance will work best for your business. All-risk policies will cover anything except what is specifically excluded in the policy. Peril-specific policies will only cover certain losses from specific perils such as flood or fire.

Method 2
Choosing the Best Insurance for your Small Business

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    Use an insurance agent. A licensed agent or broker in your state will help you make sure all required and recommended policies are in place .
    • Make sure your agent can handle all of your insurance needs. Some agents specialize in specific professions or coverage. You need a comprehensive agent who can manage all of your policies.
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    Include excess liability insurance to keep your business protected. This is often called a "Comprehensive Umbrella" policy for your business.
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    Choose insurance policies that will serve your employees as well. If you employ people, you may need employment liability insurance as well as a health insurance plans available to your workers.
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    Increase insurance coverage as your business grows. Doing an annual review of your small business insurance policies can help you and your agent assess any changes or increases that are necessary.
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    Add property damage riders to your homeowners insurance policy if you run your small business from home. Your homeowners policy will not cover all business risks, so do not expect that it will be enough for your home-based business.

Tips

  • Take advantage of resources such as the Small Business Administration (SBA). This is a service of the federal government that helps small businesses manage their operations and finances. The SBA can offer advice and resources on your insurance requirements.
  • Check with your state on insurance requirements. Your small business can be fined or closed if you are found to be delinquent in the amount of insurance you carry. This is another good reason you should work with an insurance agent who can help keep you in compliance.

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Categories: Insurance | Business