Why Insurance Matters
After starting a company, you’ll want to protect both your personal and business assets from unexpected damage. Although your business structure may be of some help, you won’t have full reinforcement until you buy insurance.
Sometimes, you may actually be legally required to have some insurance in place like workers’ compensation, unemployment, and disability coverage for employees. Check out your state’s Department of Insurance website or get in touch with your local government to learn about your state’s insurance requirements. In addition, lenders who can provide you with low-cost funding like SBA loans will often require at least some forms of insurance for your business before approving your application.
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Types of Insurance
There are plenty of options out there when it comes to buying insurance for your business. Here are some of the most popular types.
General Liability Insurance
This insurance option covers legal claims made on the business as a result of an accident, injury or negligence. The policy protects against payments as the result of personal injury, property damage, libel, slander, the cost of defending lawsuits, and settlement bonds or judgments required during an appeal procedure.
Business Personal Property
Also known as Contents Coverage, this type of insurance covers everything related to the loss and damage of company property due to events such as fire, smoke, wind and hail storms, civil disobedience and vandalism.
Building Insurance
This policy covers everything related to the damage of the Commercial Real Estate due to events such as fire, smoke, wind and hail storms, civil disobedience and vandalism.
Vehicle Insurance
For small businesses that rely on operating motor vehicles for regular operations, auto insurance can protect all of the business vehicles.
Worker’s Compensation
This policy covers medical costs and a portion of lost wages for an employee who becomes injured or ill on the job. Workers’ Compensation also protects the business from being sued by employees for workplace conditions that can cause injury or illness. Specific requirements will vary by state.
Learn more about how Workers’ Comp differs from General Liability Insurance on the SmartBiz Small Business Blog.
Professional Liability Insurance
For businesses that provide specialized services to customers, additional liability coverage can protect against financial loss as a result of illegal activity, error, and negligence.
Homeowner’s Insurance
For home-operated businesses, this insurance can protect against damage and injury caused by sudden events like accidents, fire, and theft.
Additional insurance can include product liability insurance, flood insurance, accounts receivable insurance, and others depending on your unique business situation.
How to Buy Business Insurance
Before you make the decision to purchase insurance for your business, consider and prioritize the unique risks that you face in your location and industry. Once you’ve narrowed down your options, be sure to compare the available products on the market. Use metrics like APRs, interest rates, terms, and benefits to decide which works best for you. Work with a trusted insurance agent who can help you find the best fit for your needs.
If you’re looking for more personalized advice, the Small Business Administration’s local assistance program will help you connect with local mentors through organizations like the SCORE Association, the Women’s Business Center, and the Small Business Development Center.
Learn more about SmartBiz marketplace banks’ requirements by starting your SmartBiz SBA loan application and working with our team of specialists to get to a “yes” as soon as possible. We’ll provide 5-star service and help you complete your application through a transparent, clear, and streamlined process. Don’t take our word for it! Check out our TrustPilot profile to see what our small business borrowers like you have to say.
* The information provided through SmartBiz Advisor, including the Loan Ready Score, is for educational purposes and is not the same as scores used by lenders for credit decisions. SmartBiz Advisor is not a financial or legal advisor as defined under federal or state law. Use of this information is not a replacement for personal, professional advice or assistance regarding your finances or credit history.