Small Business Owners’ Guide to Business Insurance

May 29, 2024 | Business Insurance

Small business owners pour their hearts and souls into their businesses, but one unexpected event can devastate them. A customer could slip and fall, you might experience a data breach, or an extreme weather event might destroy your inventory. You have to protect your investment in your business with good small-business insurance. 

Business insurance can cover costs associated with lawsuits, property damage, and other unforeseen events. Investing in the right insurance plan can safeguard your finances and help you focus on what matters most: building your dream. 

Learn more about common types of business insurance, how much coverage your small business needs, and how to find a great policy that prepares you for the unexpected. 

Understanding Your Business Insurance Needs

Many insurance options are available to small business owners, and some, like workers’ compensation coverage, may be mandatory under state law. It can be overwhelming to know where to begin. The truth is there is no one-size-fits-all small business insurance solution. Instead, you’ll want to pick and choose policies to create a customized insurance plan for your business.

General Liability Insurance

General liability insurance protects you from financial losses due to lawsuits, claims of bodily injury, or property damage caused by your business. For example, if a customer slips and falls in your store, general liability insurance will cover the related medical expenses and legal fees. 

Property Insurance

Covers physical damage or loss to the property where your business operates, including your building, equipment, and inventory. It will cover fire, theft, vandalism, extreme weather, and other named perils. 

Business Interruption Insurance

If unexpected events like a fire or natural disaster leave you unable to operate, this insurance will cover lost income and operating expenses. 

Workers’ Compensation Insurance

If an employee gets injured or becomes ill due to work, this insurance covers medical expenses, lost wages, and rehabilitation costs. In many states, it’s mandatory. 

Cyber Liability Insurance

Cyber liability insurance protects your business against financial losses associated with cyberattacks, data breaches, and privacy violations. Increasingly, this is becoming a must-have policy for modern businesses. 

How Much Business Insurance Do You Need?

There is no quick answer regarding how much coverage you need for your small business. The ideal level of coverage will depend on: 

  • The type of industry you are in. Your business type plays a big role in how much coverage you need. For example, high-risk industries like construction will need more coverage than a home-based nail artist. 
  • The size of your business. Larger businesses with more employees and assets need more coverage than small startups. 
  • Where your business is located. Some areas are more at risk for natural disasters or property crime, which can influence your insurance needs. 
  • Your annual revenue. The more revenue you generate, the more financial protection you need. 

Another important factor is how much risk your business is exposed to daily. If you handle sensitive customer data, for example, you might want to increase your cyber liability insurance. Or, if your clients take on physical risks (such as in a gym), you might need more liability insurance. Identifying your risks will help you and your insurance agent make smarter choices when building an insurance plan. 

The most important thing is not to underestimate your needs. It’s tempting to try to save money and opt for minimal coverage. However, being underinsured leaves your business vulnerable to financial risk. As your business grows, your risks do, too. You’ll want to have the right protections in place for now and consider potential future growth, too. 

Eber & Associates Protects Small Businesses for Life

Building a small business takes dedication, hard work, and a lot of courage. The Eber & Associates team understands what it’s like, and we want to help you protect your dream with the right insurance coverage. 

Our experienced insurance brokers will explain your policy options, assess your unique business risks, and create a customized insurance plan that balances protection and affordability. We’ll also work with the insurance companies on your behalf so you get the best coverage at the best rate. 
Focus on running your business, and we’ll focus on getting you the right insurance. Contact Eber & Associates today for a free quote on small business insurance.