5 Types of Insurance Small Business Owners Must Consider

Small businesses contribute greatly to a country’s economy. In the U.S., for instance, data from the U.S. Census Bureau showed that the number of small businesses has risen by 49 percent since 1982. Today, many individuals and groups continue to set up businesses targeting the local and international market.

Starting a business of any type requires the proper legal documents and insurance to ensure that everything is legitimate and your business is protected from various risks.

Being knowledgeable about the different types of insurance is a must. Here are 10 of them you need to consider regardless of the size of your business.

General Liability

A general liability insurance will protect your business whether you are operating a physical store or one based at home. This policy will provide coverage in the event your employees, products or services cause physical harm to a third party. It can also be applied to any property damage to a third party.

Property Insurance

Apart from your business and employees, you also need to protect your building and other property inside it. These include your computers, office equipment, tools and inventory which should be covered by a property insurance policy in the event of theft, fire and vandalism.

Business Interruption

In line with this, you can also purchase a business interruption or loss of earning insurance. This add-on will protect your business earnings in case you are not able to operate after a natural disaster such as floods or tornadoes, fire and theft in your building or due to a lawsuit.

A business interruption insurance is recommended for businesses operating in a physical location including retail stores and restaurants. It will compensate you when your company is not earning.

Auto Insurance

Businesses that purchase a vehicle need to secure an auto insurance. Having an auto insurance policy will cover for liability in case the vehicle gets involve in an accident and cause injury to a third party or damage a property owned by a third party.

A commercial auto insurance will protect employees who use the vehicle as well as products or equipment that it carries. This covers work car, vans, SUVs and trucks.

If, however, your company does not own a vehicle and your employees use their own cars when doing work for your business, you can obtain non-owned auto liability insurance. This will protect your firm in case an employee has inadequate coverage or none at all.

Professional Liability

Also called Errors and Omissions insurance, this policy is separate from the general liability and will cover for damages when your company fails to deliver the professional services as promised or was not able to properly render the service. This type of insurance is most suited for companies owned and managed by professionals such as accountants, consultants, lawyers, real estate agents, insurance agents, hair salons, notaries and technology providers among many others.