Small Business Insurance Checklist: 10 Coverages You May Need

February 02, 2021
small-business-owner

Running a small business can feel like swimming with sharks. Risks are all around you. A worker can get injured on the job. A customer can slip and fall in your store and sue you. Faulty wiring can start a fire. A hurricane, flood, or other natural disasters can damage or destroy your property. Cyber thieves can steal your data.

Any one of these risks could take a serious bite out of your bottom line. Some could even shut you down for good.

But just like you wouldn’t go into treacherous waters without a life jacket, you shouldn’t run a small business without financial protection. That means choosing the right small business insurance to meet those risks head on.

Choosing your insurance is one of the most important decisions you’ll make as a business owner.

When you consider all of your potential risks – property damage, liability claims, injuries, loss of income, and others – it can seem overwhelming.

What kind of small business insurance do you need?

The coverages and amounts you need depend on your specific industry and business. But there are common types of coverage carried by most businesses. Here are 12 types of insurance coverage you may need for your small business:

  1. Liability. Almost any business needs liability insurance. The most common is a General Liability (GL) policy, which covers claims for bodily injury or property damage caused by your business. Product Liability coverage is usually included with a GL policy and protects you from claims that your product(s) caused bodily injury or property damage.
  2. Professional Liability, also known as Errors & Omissions Insurance, covers claims related to errors and omissions by those providing a professional service.
  3. Employment Practices Liability (EPL). Also known as employers liability insurance, this coverage protects you from claims of discrimination, wrongful termination, sexual harassment, retaliation, and other types of inappropriate workplace conduct.
  4. Commercial Property. This insurance helps cover the cost of damages to your business premises, including furniture, tools, and equipment.
  5. Commercial Auto. If your business involves employees driving, you need this insurance to help cover the costs of any accidents or injuries you or your employees may cause while driving in the course of doing business.
  6. Workers’ Compensation. Have employees? If so, you’re likely required to have this insurance, which provides benefits to your employees if they suffer an injury or illness related to the job. Most states require this coverage.
  7. Business Interruption. Also known as business income coverage, this insurance helps you recoup lost income if your business is forced to close temporarily due to a covered incident.
  8. Cyber Liability. Cyber thieves are more active than ever and they’re getting smarter. Data breach or cyber insurance can help your business respond to a data breach and assist with the cost of alerting the public and restoring your reputation after a data breach.
  9. Commercial Umbrella. If a liability claim against you exceeds your policy limits, you could have to pay legal costs, medical bills, damages, and judgments out of pocket. Commercial umbrella coverage gives you an extra safety net by extending the limits of some of your other liability policies.
  10. Life and Disability Protections. When small business owners or their key employees are unable to work due to disability or death, it can be hard for small businesses to survive. There are a number of life and disability insurance coverages to help protect against these risks include business overhead expense (BOE) coverage and key person coverage.

Need help figuring out which coverages will best protect your small business? Contact the small business insurance professionals at Heffernan Insurance Brokers today or explore our on-demand business insurance options using our online quote tool.