I have been a small business owner for years. For anyone who is starting a business this year, I wanted to share something I wish I knew at the start of my journey.

Purchasing business insurance can be very confusing, which why many small business owners do not even bother with the process. There are various insurance packages suited to different types of businesses, depending on the company’s size, location, and other factors. These choices can be overwhelming, particularly for startups. In this article, we will look at the various types of small business insurance, how much they cost, and the process of purchasing the best small business insurance coverage.

Commercial general liability

Commercial general liability is one of the most important kinds of insurance protection that small businesses should consider. Every business is likely to face the risk of liability claims—it doesn’t matter the kind of business. It could be professional services, retail, creative services, contractors, etc. Commercial general liability coverage protects bodily injury and property damage.

Bodily injury is one of the most common liability claims against small businesses. This injury is usually to a third party and assumes that there was negligence in the part of the business owner for the injury to have happened. Sometimes, a person may have caused their own injury but if it happened on the business owner’s property, a liability lawsuit could still be filed against them by these persons. These lawsuits are not cheap and they consume a lot of time; there may be a need to fund the medical bills, legal fees, lost wages, and all other related costs.

Another common liability claim against small businesses is property damage. As a small business owner, property damage should be taken as a priority. It can damage business reputation and even cause costly legal expenses if a business owner is found to be legally responsible for damages made to the property of a third party while in their possession.

Woman In Black Blazer Sitting On Black Office Chair

Business interruption insurance

Business interruption insurance is designed to keep a business moving after suffering a major loss. It offers financial ease to help businesses sort out their payroll, bills, and other current expenses until the business gets back. This type of insurance works with business continuity planning and should be considered by all startups, small business owners, and entrepreneurs. It is crucial for businesses to take note of the risk they face and have a plan with clear steps to maximize the consequences if they suffer any loss.

Product liability insurance

Product liability is particularly important for small businesses that provide a product rather than a service. If an issue arises with a product, the issue can be traced back to the business that sold the product, and if the business is confirmed responsible for the problem of the product, this could lead to a time consuming and costly lawsuit. But the good news is that with product liability insurance, businesses can be protected from medical and legal costs that may come up in these circumstances.

Common issues that can result in liability claims include:

  • Faulty products
  • Products that cause bodily injury to a customer
  • Products that cause property damage
  • Illness caused by food or beverages

Professional liability insurance

Professional liability insurance is designed for businesses that offer professional or creative services. This particular insurance can give coverage when clients claim that they had suffered some losses because of an omission or error in the service provided by a business.

Some of the businesses that should have this coverage include:

  • Copywriters
  • Web designers
  • Graphic designers
  • Consultants
  • Photographers
  • IT technicians
  • Public relations representatives
  • Brokers
  • Financial advisors

Thinking about growing and scaling your business? Do prepare for the long term, and consult with an insurance agent today. I highly recommend the Byron Galindo insurance team:

Byron Galindo – State Farm Insurance Agent
214 Pier Ave, Santa Monica, CA 90405