Small Business Insurance Basics: 10 Things You Need to Know Now

When you hear the words “business insurance,” you might think this only applies to large, established businesses. But in fact, this is an important topic for any sized business – from the largest corporations to the smallest, one-person operation and everything in between.

Whether you’re simply in the beginning stages of getting a business idea up and running, or already own an established business, it’s important to know a few basic things about how business insurance works, and what kinds you might need. Here are a few tips to get you started – or to provide you with a quick review.

1. Property Insurance – understand what it covers

Property insurance covers not only the physical structure which houses your business, but also the contents inside the structure. This could include equipment, office furniture and even inventory.

2. Liability Insurance is a must

No one likes to think about it, but getting sued is always a possibility for a business, regardless of its size. Having the proper amount of liability insurance is of the utmost importance. Liability insurance can help with expenses if your business is sued, but it can also help pay for expenses if anyone is injured due to a faulty product or service.

3. Worker’s Comp – check your state’s requirements

If your business has employees, it’s very possible that you’ll need worker’s compensation insurance. If anyone is injured on the job while working for you, worker’s compensation insurance will help pay for medical expenses. Most states require worker’s comp for all sized businesses, but be sure to check your state’s requirements to be sure that you get the proper type – and amount – of coverage.

4. Errors & Omissions

E&O Insurance is similar to Liability Insurance, but it is specifically for professional services businesses. This type of insurance can cover expenses that may be incurred due to accusations of negligence, or the failure to perform your professional services. Even if you haven’t.

5. Got employees? Consider EPLI

Employment Practices Liability Insurance applies to situations where businesses are sued for things such as discrimination, sexual harassment, or wrongful termination. At one time, these topics were only of concern to larger companies, but in today’s environment, businesses of all sizes can be subject to these types of suits. If your business has employees, it’s wise to consider adding EPLI coverage to your Business Owner’s Policy (BOP, described below).

6. Is Key Employee Insurance worth your while?

Many times, the success of a business relies on the involvement of specific employees. If one of those employees were to pass away unexpectedly, their absence could affect the profitability of the business. The beneficiary of a key employee policy is the business itself. Key Employee policies can often be requested by lenders, to meet certain credit requirements.

7. Cyber Liability Insurance is gaining in popularity

More and more business is being transacted online. And more and more data are being stored in “the cloud,” allowing for ease of access and reducing the need for companies to invest in storage or storage facilities. However, as more business is transacted electronically, the more that information is opened up to theft and hacking. Cyber Liability Insurance will help protect businesses if they experience a data breach; it will help cover costs ranging from legal expenses to public relations expenses.

8. Directors & Officers Liability Insurance is NOT the same as E&O

As the name implies, D&O insurance specifically protects the directors and officers of a company. D&O insurance protects the business, and sometimes the directors and officers themselves, in the event of legal action brought for alleged wrongful acts. While lawsuits such as these are less common in the United States, if your business operates outside the U.S. this type of coverage is definitely worth investigating further.

9. Don’t forget about the car!

If you have vehicles that are owned by your business, and are used exclusively for running your business, they won’t be covered by personal car insurance; a separate business auto insurance policy is needed. There are many types of coverage available, and auto insurance can sometimes be bundled into your Business Owner’s Policy. However, individual plans can be more easily customized.

10. Consider a BOP

A Business Owner’s Policy can be a great way to bundle common types of business insurance into one handy policy. BOPs are customizable, and can save you money since there are multiple types of coverage combined into one policy. Purchasing a BOP can also simplify the insurance process, since you’ll have just one policy, one renewal date, and one premium payment to deal with. While combining policies can be extremely convenient, it should only be done if you can truly have all of your insurance needs met by one product. If your business is of an unusual nature, or you have specific insurance needs, it might be best to still consider individual policies. Working with a trusted insurance agent or broker will help you ensure you’re getting all of your business insurance needs taken care of.

5 Types of Business Insurance and Why You Need Them

No matter the size or nature of your business, one thing that remains the same is the need for business insurance. There are many different aspects of your business that you’ll want to take into consideration when looking for new business insurance – or reviewing your current insurance coverage. Since every business is different, each one will have different insurance requirements. For example, a company that produces physical goods may need different insurance than a company which offers services. In either scenario, there are some similarities, and listed here are a few types of insurance that all businesses should consider.

Workers’ Compensation Insurance – for your employees

Workers’ Comp insurance is required by law in almost every state. It can provide coverage for medical costs and a portion of lost wages for an employee who becomes injured or ill on the job. Typically, this type of insurance only covers injuries or illness that occur on the job site – for example, if an employee slips and falls on a wet floor.

Since the laws regarding Workers’ Comp can be different depending on where your company is located, it’s important to work with an insurance professional to make sure you’re getting the coverage that’s required, as well as what you need for your particular business.

General Liability Insurance

General Liability Insurance is designed to protect you and your business from a variety of claims, including accidents, injuries, or claims of negligence. This type of insurance can help pay for things like property damage, medical expenses, libel, slander, legal costs, and faulty products. No one expects to get sued, but the reality is that it’s always a possibility. You don’t want to leave your business open to these types of situations, and the broader the protection, the better.

Professional Liability Insurance – “Errors and Omissions” coverage

Professional Liability Insurance can also be known as “Errors and Omissions Insurance,” or “Malpractice Insurance.” It protects you from lawsuits that allege negligence in providing professional services, providing shoddy work, or making mistakes or omissions. This type of insurance is particularly important if you have a service-based business, but can also be necessary for other types of businesses as well. Mistakes happen – so adequate Professional Liability Insurance can be helpful, even if you don’t think you’ll need it.

Property Insurance

The definition of “property” is broad, and can mean different things to different types of businesses. That’s why it’s important to make sure you carry adequate Commercial Property Insurance. Without this type of insurance, most small businesses wouldn’t be able to replace their equipment should something happen to cause damage or destruction. Property covered by this type of insurance can include buildings, computers, inventory, supplies and equipment. There are two types of Property Insurance: “all-risk” policies cover just about everything, and is a good way to avoid duplication or overlap of coverage, as well as gaps in trying to cover your liabilities. “Peril-specific” policies, or “named-peril” coverage applies only to particular perils that are specifically named in the policy. They’re usually needed when there is a high risk in a very particular area.

Life Insurance / Key Executive Insurance – protection and benefit

Offering life insurance for employees can be a valuable benefit when trying to attract high-quality employees. A business can even offer additional coverage for executives. These employees are deemed to be crucial to the running and success of the business, and may sometimes require additional insurance, above and beyond what the normal employee benefits provide. This can be another benefit in attracting top talent.

A business can also offer special “Key Person” policies for employees without whom the business could not function. Key Person Insurance protects against a key employee’s unexpected death – often times the benefit amount equals the expected revenue loss and costs required to find and train a suitable replacement. The business pays the premiums, and the insurance is considered a business asset.

It’s possible to combine some of these basic coverages as a package policy, often referred to as a Business Owner’s Policy, or BOP. Many insurance companies bundle certain coverages, and this can save you money, as long as you make sure you get the proper type of coverage.

Even if you feel you have adequate business insurance coverage that meets all your current needs, it’s still advisable to review all your coverage on an annual basis, to make sure that your coverage continues to provide everything that you need. This is particularly important if you or your business have experienced any major changes, such as change in family status, or a significant increase or decrease in business activity. Additionally, be sure to work with a reputable, licensed insurance agent or broker, who has knowledge regarding business like yours.

Mistakes To Be Avoided When Questing For a Full-Proof Business Insurance

Since ages, safety has been offered the pilot seat. No matter, what circumstance brings for you; being insured is always the wisest choice. Well, as a matter of fact, today most of us have understood this and are covered with some highly beneficial insurance policies. However, this can come to you as a surprise, there are people around, who still neglect the importance of a right insurance.

Note, the consequences of no insurance coverage or inadequate coverage are devastating; one cannot even commit, what may happen, as there is a whole world of things that can happen to your business. Not protecting it with the right insurance can surely cost you in so many ways.

In addition to above, just getting any insurance coverage is not enough, getting the one that’s best for your business is the call of the occasion. And, not doing it the right way, may put you on the losing end during crisis; when you need help the most.

Besides all this, considering some common mistakes made, when searching the best insurance policy for your business, may essentially take you to the right path. Knowing these mistakes will surely help you, to avoid them in the future. So, lets quickly go through some common practices to be avoided, when questing for the right business insurance.

5 Mistakes to be avoided when questing for a full-proof business insurance:

1. Deteriorating the importance

Business owners around the world, although have understood the importance of business insurance. Still, not all business people necessarily think this way. Some may think it’s unnecessary as their business is small, while others may consider it too costly. In fact, some may even think that, as they’re already covered by other forms of insurance policies; it’s more than enough for their property.

2. Lack of the basic insurance knowledge

Not knowing the basic issues, when questing for a business insurance may prove lethal to you as well as your business. In fact, being well-versed about all pros and cons related to any business policy will most certainly help you get the right insurance. Beside all this, as every insurance policy is unique in terms of the coverage it offers as well as the conditions, governing it; treating every individual policy separately is advisable. For example: Would you get car insurance for you home? Would you get life insurance for your car? Of course you wouldn’t, so be careful and understand even the minute detail before sealing any insurance policy.

3. Not getting insurance early enough

Taking early insurance into account, will help you cultivate a business of your dreams. If you don’t get insurance for your business early enough; obviously in case, if something happens and you need it early, you’ll be stuck with paying for the damages yourself.

4. wrong insurance provider

As, not everyone can support multitasking, similar applies to businesses as well. Just because your home insurance provider is a leader at that particular domain, doesn’t make him qualify as an ace business insurance provider too. So, be cautious.

5. wrong kind of coverage

Somewhat similar to the risk of getting along with a wrong insurance provider, a wrong kind of coverage is a mistake too. Ultimately, you’re the person in charge for making the right business decisions. You’re the best person to look out for your own interests.

Henceforth, keeping all the above mentioned points, you’ll surely end with the some most suitable, big or small business insurance brokers in Sydney. You can even visit online insurance providers to sort the best for you.