7 Types Of Insurance Small Business Owners Should Consider

Being a small business owner can be overwhelming that you often neglect the importance of having the right type of insurance to consider. However, you have to take note that without any necessary coverage, you might end up losing everything you’ve worked for.

From your employee’s computers and dropping a hammer while working in another property to a customer slipping, there are countless things that insurance can protect you from. However, choosing the best insurance for your small business can be both confusing and challenging because of the available options.

If you don’t know what to choose, here are some of the types of insurance that small business owners must take into consideration:

  1. Marine Insurance

If you’re in the marine industry, you should consider getting marine insurance. Unlike other insurance, it covers the theft, damage, and loss of goods in transit, including the storage points between points of the final destination and origin. Hence, if you want to protect your goods from possible damages, getting marine insurance may come in handy.

  1. Property Insurance

If you have a personal business property or you own a building with computers, office equipment, tools, or inventory, you must consider buying a policy that’ll cover possible losses in case of fire, smoke damage, theft, and vandalism. 

You might also like to consider the loss of earning insurance or business interruption insurance as part of your property insurance policy to protect your earnings if your business can’t operate immediately.

  1. General Liability Insurance

This type of insurance protects your product, business, services, and your employees from property damage or bodily injury. Essentially, having this type of small business insurance protects businesses against claims that happen while customers are on your property. 

For instance, if you’re running a restaurant, general liability insurance will cover you if customers were to trip and sprain their ankles in your restaurant. This may also include product coverage in case patrons get food poisoning from your products.

If you’re a contractor working on a remodeling project and someone walks by and trips over some tools you’ve left accidentally on the sidewalk, general liability insurance will cover bodily injuries to others due to negligence.

  1. Worker’s Compensation Insurance

This provides insurance to your employees who are injured while doing their job. Also, worker’s compensation is a kind of insurance that offers medical benefits and wage replacement to those who are injured while working. In exchange for such benefits, employees give up their rights to sue the employer for the accident.

As a small business owner, having worker’s compensation insurance is crucial since it protects your business and yourself from legal complications. State laws may differ, but almost all businesses are required to have this insurance.

  1. Commercial Auto Insurance

This insurance covers any vehicles operated and owned by your small business. You’ll find typical benefits found in personal auto insurance like personal injury, liability, collision, and coverage that’ll protect you in case of an accident involving uninsured motorists.

The only difference of commercial auto insurance is that it’ll cover you in case employees use company vehicles to get from and to work. In addition, the policy terms will cover running work-related tasks or transporting equipment, supplies, or products that have something to do with your business operations.

  1. Life Insurance

This will benefit businesses in two ways. As the business owner, the funds from your policy might be used to keep the business going in case of your sudden demise. By leaving instructions regarding your money or business proper to be handed over, it’ll help settle your debts, use the proceeds to cover your business expenses, and place more money in contingency accounts.

You may also secure life insurance on your key employees or officers. In case one of them died, the funds from the policy will give you the resources to locate professionals who can fill in temporarily while you’re looking for a permanent replacement. With this, your business operation won’t be affected as you and the rest of the employees mourn the loss.

  1. Cyber Liability Insurance

If you store sensitive customer information on your computers or you have a business website, you must think of getting cyber insurance since it’ll protect your business in case of cyberattacks.

Whether your website is defaced and hijacked or your client information or sensitive data is stolen, the costs of fixing the damage and the associated legal costs with a data breach can have an impact on your business, particularly the damage it can cause to the reputation of your business.

Bottom Line

As a small business owner, it’s crucial to know your risks. By ensuring all your assets and covering yourself from liability and business interruption, you’re establishing the resilience of your business and ensuring that it can continue to operate in the long run. 

If you still don’t know what type of insurance to consider, consult an expert and talk to other small business owners to get some recommendations.

Dorian Koci

Dr. Dorian Koçi is a historian, Director of National Historical Museum of Albania and lecturer in Tirana State University, Faculty of History and Philology and New York University of Tirana.