What Kind of Insurance Do Small Businesses Need?

In this article, we discuss some of the most common insurance policies small business owners purchase for their companies and why they're important.

Small businesses are the foundation for future economic success; they bring forth the innovation to increase efficiency in our evolving world. However, insurance companies make it difficult to figure out when to get your first commercial insurance policy and what policy is the best fit for your company. There are many different types of policies and types of insurance for different aspects of your business. Therefore, there are a few things to keep in mind when initially considering shopping for insurance for your small business.

healing Workers Compensation Insurance

First, you should be aware that hiring employees requires its own insurance coverage. In fact, this is one of the most common insurance triggers and often one of the first policies a business owner will buy. Even though it varies by state, workers’ compensation is required by law, and the penalties of having employees without a workers’ compensation insurance policy are extremely steep. Not only is it required by law, but it’s a critical layer of protection because it provides coverage for workers who are injured on the job, thus protecting you and your business from potential lawsuits that could be filed by employees if you don’t have this coverage.

security General Liability Insurance

In addition to workers’ compensation insurance, it is crucial to invest in general liability insurance to protect your company and assets from certain third-party claims and lawsuits. General liability insurance is coverage that protects against a wide range of claims involving injury or damage to property. Without this coverage, your small business can face high legal and compensatory costs if someone is injured or something is damaged in relation to your company. In addition, if you operate your business out of an office or retail space, all lease agreements will require a general liability policy to be in place making this coverage mandatory.

beach_access Umbrella Insurance

To further minimize risk and protect your business’ future, consider adding an umbrella insurance policy. An umbrella policy is just like it sounds; a protective insurance layer that sits on top of your other liability policies to provide your company with additional resources to cover losses if your other policies do not cover the full amount of a claim. The umbrella insurance policy is ideally suited to help prevent major financial losses due to claims and lawsuits, and it helps you and your company protect assets.

domain Business Owner’s Policy

Lastly, a business owner’s policy (BOP) is a more flexible type of insurance plan that adapts and caters to the needs of your company by combining multiple types of coverage into a single policy. The foundation of a BOP is general liability insurance which we discussed above. Then, depending on the location of your business and the risks it faces, a business owner’s insurance policy can include business interruption coverage which would respond to protect the lack of income following disaster. Nearly every BOP will also include basic property insurance to protect your business property and any inventory. This is, perhaps, the most cost-effective way for a small business owner to secure a range of coverage for their business and makes a great first policy for just about any type of company.

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Insurance for Small Businesses

Being a business owner has a fair number of risks associated with the profession, so why add to the unnecessary stress by having to worry about the risks that can be protected with commercial insurance? Some policies will be required by landlords and governments, so safeguarding your business from the very beginning is a worthwhile investment. With Layr, business insurance for small businesses is easy to obtain and extremely affordable with our business owner’s policies starting as low as $40 per month. And our online platform means you can access your policies wherever you are. Insure the dream that you have worked so tirelessly for. Let Layr help protect your company and ensure that your dream continues to be your reality.