Does My Small Business Need Commercial Insurance?
Commercial insurance is one of the most important investments you can make when starting a new company. Good commercial insurance will protect your company from severe financial loss and can be the difference between going under and staying afloat. Without business insurance, business owners may have to pay out-of-pocket for costly damages and legal claims against their company. It’s important to be knowledgeable of the different types of commercial insurance and work with a reputable agent to create the most appropriate policy for your business.
What Are the Basic Insurance Needs for Most Businesses?
The protection and peace of mind insurance brings is critical, especially for small businesses. Smaller businesses often operate with less capital than larger companies and have a lower ability to absorb loss stemming from accident, liability, or theft. An appropriate amount of insurance coverage can be the difference in whether a small business recovers from a catastrophic loss or goes under.
Most small businesses will need a business owner’s policy (BOP). A BOP combines business property, business liability and business income insurance in one policy. Business property, sometimes called commercial property, helps protect the physical location of your business and business assets. This includes tools, documents, and furniture.
Business liability, sometimes called “commercial liability,” helps cover the costs of liability claims made against your business by a third party. For example, if a customer were to slip and injure himself on your property, he could file a lawsuit against your small business, or if your products hurt someone or damages their property. Business liability insurance can help cover the costs of that claim.
Business income insurance helps replace lost income when your business can’t operate due to a covered loss. This is a great way to help ensure you can keep paying your bills, payroll, and ride out the temporary suspension of your business. For example, let’s say a hurricane damages your business and it’s closed during repairs. Business income insurance can help replace the lost income while repairs are being made.
There are also several instances where certain states require business insurance coverage. In most states, businesses with employees will need coverage like workers’ compensation insurance, unemployment insurance or disability insurance to protect your business from claims made by current or former employees.
Is Business Insurance Required?
The short answer is that it’s almost always a good idea. No matter what kind of business you’re running, the protection that commercial insurance provides is critical, and it can really make or break a business.
However, in almost every state a certain amount of insurance must be held for employees working under your business. If you have employees, most states require you to have workers compensation and unemployment insurance. Depending on where your business is, you may need disability insurance. Business insurance is a tool for business owners to cover themselves and their assets in case of an unforeseen event.
Why Business Insurance? Specific Needs for Your Business
There is a wide variety of business insurance coverages available to business owners, so they can tailor their insurance protection to address the specific risks facing their business. When choosing coverages for your business, think about the important aspects of your operation that need protection. Businesses in different industries need specific business insurance coverages to help meet their unique needs. These could include:
- The type of work you do
- Your physical premises
- Property and equipment
- Intellectual property
- Employees and customers
Keep in mind that as your business grows, your coverage needs may change, so be sure to connect with your insurance agent for an annual insurance review. Insuring your investment in your business is what every business owner needs. We know you work hard for your business, so if you experience a loss, we want to make sure you are covered. Medlin & Associates offers you the coverage you need for your peace of mind.
Medlin & Associates is an exclusive insurance agency serving the Dallas, Denton and all of our Texas family. We offer customized insurance options for personal, life or commercial insurance.