Different Types of Insurance for Small Businesses

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As a small business owner of both online and offline businesses, I can attest to the importance of insurance, especially when involving trades that heavily involve the use of mobile equipment and carry with them a high degree of physical interactivity with human beings and society at large.

The lack of insurance, whether in one’s personal or entrepreneurial life, has led to disasters in people’s lives, many of which I have personally witnessed. I believe one can never be too insured. But in addition to the amount, one must be insured appropriately – i.e. carry the right type of insurance that caters to one’s unique situation.

In this article, our contributor has done a good job highlighting some of the types of insurance coverage applicable to small businesses. This is not a comprehensive list by any means, but a good starting point that hopefully will stimulate your thought process in determining what insurance is most suitable for you. I hope you find it helpful.

If you’re a small business owner, your biggest concerns may be bringing in cash and growing your sales. While it’s true that these efforts are integral parts of a successful business, there is one more consideration to keep in mind: Insurance.

Considered a luxury to some small businesses due in part to costly premiums, insurance should be considered a necessity for all businesses regardless of size and capital. After working so hard to get your business off the ground, why wouldn’t you ensure protection of your assets and investments?

For some small business owners, price is the largest obstacle to obtaining the various forms of suggested business insurance. While it’s true that the premiums are pricey, they are an important part of a business budget and should not be overlooked.

Types of Insurance for Small Businesses

There are many types of insurance available for small business owners. The broad range of coverage, premium costs and packages available nearly guarantees there are options to fit even the leanest of budgets. If you own a small business, here are a few insurance types you won’t want to be without:

• Liability insurance. This is one of the most important types of insurance for any business owner. In the event of an accident due in part to products or services your business sells or even a property-related incident (for instance if someone slipped and fell while at your business), you and your business are protected.
• Litigation insurance. With litigation insurance, you’re protecting yourself and your business from legal recourse and lawsuits. Litigation insurance can be purchased from a variety of brokers and can be combined with most of the other types of insurance in this list.
• Commercial Equipment Insurance. This is a category of insurance that spans items such as vehicles, appliances and machines. For example, if you’re operating a service business and have a van being driven around by your or an employee, you’ll want to have commercial van insurance. There are many online companies that can help you with a quality van insurance quote.
• Home-based business insurance. If you’re operating your business from your home, make sure to look into this type of insurance because any business losses will not be covered by homeowners’ or renters’ insurance.
• Key Person Insurance. If you have a business partner, this insurance will protect your business in the event of death or inability to perform current duties. Key person insurance is similar to life insurance—each partner would have their own policy and coverage terms.

These are just a sampling of the many insurance options available for small business owners. When it comes time to buy your policy, make sure you’ve educated yourself and have chosen the correct coverage for your needs.