What Kind of Insurance Do Small Businesses Need?
By Paria Esmaeelzadeh | 07/18/2018
Small businesses are the foundation for future economic success; they bring forth the innovation that increases efficiency in our evolving world. However, figuring out when to get your first Commercial Insurance policy and which policy is the best fit for your company’s unique operations can be confusing. To help demystify the process of shopping for business insurance , we break down some of the most common policies that provide a solid base of coverage for most small businesses.
healing Workers’ Compensation Insurance
First, you should be aware that hiring employees generally triggers the purchase Workers’ Compensation coverage. Workers’ Compensation Insurance covers employees who are injured or become ill on-the-job and will respond to pay for the following:
- Medical bills
- Lost wages
- Ongoing care expenses
- Death costs
Even though specific coverage requirements vary by state, Workers’ Compensation is required by law, and the penalties of having employees on your business’s payroll without a Workers’ Compensation coverage are steep. Because Workers’ Comp is legally mandated, not having the proper coverage exposes your business to employee lawsuits, fines, and even potential jail time. Therefore, the right Workers’ Compensation policy will protect your business twofold: employees are provided with financial assistance in the event of workplace injury and your business operations are protected from the financial risk of inadequate 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 covers a wide range of claims involving injury or damage to property. Without this coverage, your small business can face legal and compensatory costs if someone is injured or property damage is attributed to your company. Additionally, if your business operates in an office or retail space, all lease agreements will require your business to have a General Liability policy in place.
beach_access Umbrella Insurance
To further minimize risk and protect your business’s future, consider adding an Umbrella Insurance policy. An Umbrella policy functions just like it sounds; Umbrella Insurance sits on top of your other liability policies to provide your company with additional resources in the event of a costly claim that exceeds your base policy limits. An 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 flexible type of insurance plan that adapts and caters to the needs of your company by combining multiple coverage types into a single policy. The foundation of a BOP is General Liability Insurance. Depending on the location of your business and the risks it faces, a BOP can also include Business Interruption Insurance (BII) to cover the lost income and expenses during a temporary business closure as the result of a covered event. Nearly every BOP will also include a basic Property Insurance policy to protect your business’s property and inventory.
Because a BOP effectively bundles basic coverages at a lower cost than individual policies, it is perhaps the most cost-effective way to secure a range of coverage and makes a great first policy for just about any type of company.
Insurance for Small Businesses
Being a business owner comes with inherent risks, but why add to the stress by worrying about the risks that business insurance can protect? Safeguarding your business from the very beginning ensures that when unexpected events come your way, you won’t have to worry. With Layr, business insurance for small businesses is easy to obtain and extremely affordable–our Business Owner’s Policies start as low as $50 per month and our online platform allows you to access your policies whenever, wherever. That’s #BetterBusinessInsurance.
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