Any good small business is built on a great idea and a solid business plan. The planning that goes into creating a small business is really key to its long term success. Everything from the product or service being offered, its location, and its market all require strategic planning. Implementing that business model needs many stages in which to develop, and there are numerous state and Federal laws that apply to any business endeavor.
Choosing the Right Insurance for your Business
Small business insurance is one of those facets of planning that is essential to its long term success, both because some forms of small business insurance are required by law, and because some kinds of small business insurance offer great long term protection for a small business owner’s investment of capital, time and resources. There are great resources online for small business owners to explore business insurance articles to determine the best small insurance for their company.
Which Small Business Insurance is Required By Law?
Only three types of insurance are required by law for businesses with employees. These kinds of insurance are not required for small businesses with only one owner and employee. Workers Compensation Insurance is required by law on a self-insured basis. Employers have the option to provide this insurance through a commercial insurance carrier or through their respective state’s Workers Compensation Insurance Program.
Unemployment insurance, although required by law, is actually paid through a tax. Finally, some states require employers to offer disability insurance. This provides coverage for partial wage replacement for employees in the event of non-work related sickness or injuries. However, only six states require this, and their requirements vary considerably.
What Are the Other Options for Insurance?
Insurance coverage for small business has wide ranging options. A small business owner needs to decide the extent of their risk, and where to put the best protections for their business investments. The cost and coverage will vary tremendously depending on the insurance company, but insurance companies provide coverage for any conceivable risk that a business may face.
A business owner’s policy insurance package will generally bundle all of the different kinds of insurance coverage that a small business will need, and this can be tailored to the specific needs of the small business. For instance, if a small business does not have vehicles for its business, it will generally not need insurance to cover them. A business owner’s policy has the advantage of being cheaper than separate policies, but it is still worthwhile to know what they are.
General liability insurance for small business generally provides coverage for the cost of legal hassles that arise due to accident, injuries on the job, and claims of negligence that may be brought against the business. It is a way that businesses can defray some of the legal costs associated with suits arising from damage to body or property by a third party. It also provides coverage for the costs of lawsuits involving libel, slander, settlements, and judgments required during an appeal proceeding.
Property insurance is kind of a no-brainer for a small business owner. This provides good protection from loss and damage for everything related to company property. This can include damage resulting from fire, theft, vandalism, civil disobedience, and hail storms. The definition of property can be fairly broad in this context as well. This may include lost income, business interruption, buildings, company papers, and money. Property insurance falls under two categories.
It can be an all risk policy which is generally more expensive, and it can be a peril specific policy. Earthquakes and hurricanes tend to be specific to certain regions of the country and would fall under a peril specific policy.
A small business owner should consult with their local insurance broker to determine the best insurance needs for their small business. A small business owner wants to control their costs as much as possible, and it is important to consider the right insurance.
Amy Nielson is an avid blogger. You can follow her on Twitter @NielsonAmy.
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