Insurance Coverage – Is Your Small Business Protected?

You know that you need insurance coverage for your home, car, and even your health, but did you know that your business needs protection, as well?

Many entrepreneurs find themselves starting a business by chance, stumbling into being an entrepreneur, and making it up as they go along. The thought that they might need to purchase a business insurance policy probably doesn’t cross their mind.

Even the smallest of companies should look at what type of insurance coverage they need. While many small businesses probably could get away with a basic business owners policy, many other companies need specialized coverage. Depending on what industry you are in, what your company does, and if you have employees, your business insurance needs may include specialized coverages not found in a basic policy.

Basic Protection

If you are in business, then you need business insurance, period. The simplest policy you can get will include basic liability insurance protection, and should also have coverage for business property. If your company owns a building, you will need a property policy that covers the structure, as well as all of your other business property including computers, office furniture, etc.

No matter the size of your company, you need liability insurance for small business coverage. After all, if you are in business dealing with the public, or other companies, your company will be liable for its actions, as well as the actions of its employees. Depending on your situation, there is other specialized liability coverage that may be applicable to your business.

Specialty Protection

Business liability insurance coverage comes in many different forms, depending on the needs of your company. Following are some examples of liability coverage you may need to consider:

  • Vehicle insurance – Any company operating vehicles in the normal course of business should have a commercial auto insurance policy. Also, if you use a personal vehicle for business use, you will need a commercial policy. Most personal auto policies don’t provide coverage for business use.
  • Workers compensation insurance – If you have employees, then you may need to purchase workers compensation coverage. Most states require you to purchase this coverage once you have a certain number of employees, such as 4 or more. Workers compensation is a no-fault coverage that protects employees that are injured on the job.
  • Other coverage – You may need to purchase other specialized coverage including product liability insurance, surety or fidelity bonds, and errors and omissions insurance coverage. Discuss your company’s specific needs with a licensed commercial insurance broker to see what insurance coverage is right for your business.

Correct Coverage Levels

Once you have determined what type of business insurance coverage you need, you want to determine what levels of coverage you require. Your insurance policy limits should reflect the amount of exposure your business has. It does your company no good having the right insurance policies if the coverage limits are set too low.

No matter what type of business you own, you will need one form, or another, of business insurance coverage. Unless you are in the insurance business yourself, you may be having a difficult time figuring out what coverages you should purchase. This is where seeking professional advice is a great idea. Talk to a business insurance broker about what insurance your company needs, and discuss with your accountant what your coverage limits should be.

It is cheaper in the long run to purchase the business insurance coverage that you need now, rather than waiting until it is too late and being found liable for amounts that have the potential to put your company out of business. If you don’t have business insurance coverage, then get it today!

About the Author: Marshall Davis started Talking Small Biz ( to provide a source for small business services and product reviews. His website features products and services that help the entrepreneur start, grow, and maintain a successful business.