What is small business insurance?
If you’re starting a new small business, there’s a good chance someone has recommended pursuing small business insurance. But what is small business insurance? And why is it important that your small business has it firmly in place right from the start?
Small business insurance is an overarching idea under which resides several important insurance products. This includes general liability insurance, property insurance, professional liability insurance, and directors and officers insurance, to name a few. All of these products are designed to help protect your business and keep your operations running should an emergency arise.
Small business general liability insurance
Arguably, the most important type of insurance for a small business is general liability insurance. It’s vital every small business have a general liability insurance policy in place before operations get under way, as this type of coverage provides covers defence costs in the event that you, your employees, or your products cause personal injury or property damage to a third party.
Because you cannot possibly control all of the actions of your employees and/or customers, having general liability insurance can help keep your business running if your organization faces a lawsuit involving the conditions mentioned above.
Small business property insurance
Most businesses have a base of operations, like a building, in which they operate. This typically includes hardware like computers and networking equipment, as well as office furniture, tools, and other gear that’s essential in running your business.
Losing access to this equipment is likely to have seriously adverse effects on your business, which means it’s vital that every small business acquire property insurance. Should your operation be negatively impacted by a fire, break in, flood, or similar problem, you’ll be able to access coverage that can help keep your business running.
Small business professional liability insurance
Also known as errors and omissions insurance, professional liability insurance is designed to protect your business in the event that a customer feels your company has failed to properly render professional services. For example, if you had a customer who filed suit arguing the strategy you developed and recommended harmed their business, professional liability insurance could help cover the cost of defending your organization in court and/or pay a settlement or judgement.
It’s important to note that general liability policies typically do not cover this protection or the associated costs. Professional liability insurance is particularly useful for organizations that provide services that may be deemed subjective, such as law, accounting, consulting, real estate, and financial advisory firms.
Small business directors and officers insurance
Generally speaking, the higher one is in an organization, the more responsibility they bear. That’s why it’s important for management executives and other influential figures in your organization to acquire directors and officers insurance. It can provide ample coverage in the event a senior employee engages in a ‘wrongful act’ which could be a breach of corporate duty, allegations of misrepresentation etc.
Remember that even a small actions taken by one of your senior executives can have significant ramifications. That why it’s important all small businesses have directors and officers insurance in place.
Other insurance options for your small business
These are just some of the specific types of insurance that make up small business insurance. There are others, including cyber liability insurance, employment practices liability insurance, and umbrella liability insurance. These too may be required to meet all of your small business’s specific needs.
To learn more about this subject and/or to get an insurance quote, reach out to ALIGNED Insurance Inc. today. We can work together to find appropriate insurance for your small business.