There are over 33 million small businesses in the United States, and many of them are either uninsured or underinsured. According to Forbes Advisor, the majority of small businesses have no employees at all. A survey found that poor money management and crisis evaluation are the leading causes of small business failure.

A small business requires the same level of insurance protection as a large or medium-sized organization to safeguard its cash flow and escape bankruptcy. However, because small businesses have fewer employees and resources, it can be challenging to establish a portfolio analysis and insurance liability department. These responsibilities can be delegated to expert insurance providers who can conduct a thorough risk analysis and provide excellent insurance advice to small businesses based on various parameters.

Here is a list of the various types of insurance that small businesses must have to be fully protected against any type of damage, legal liability, or reputational harm.

Professional Liability Insurance

When a customer purchases your product or receives your services and is injured or suffers damages because of the offering, they have the right to file a complaint against the company. Professional liability insurance ensures that any damages or financial losses incurred due to the business’s services are covered. 

Some of the reasons why professional liability insurance is purchased include missed deadlines, failure to deliver work, negligence in the workplace, and so on. This type of insurance is ideal for paying any settlement or litigation fees so that the company does not lose a large sum of money or its reputation because of such complaints.

General Liability Insurance

This is one of the most common types of insurance for small businesses. With the help of this insurance, any bodily harm or operational damage is compensated. 

The premiums for general liability insurance are determined after a thorough inspection of the property and calculation of the risks involved. Any legal fees, judgments, or settlements can be paid without disrupting the cash flow with this type of insurance.

Worker’s Compensation Insurance

Even if your company has limited staff, you should still get worker’s compensation insurance. This type of insurance ensures that all injuries or illnesses suffered by employees associated with your company are compensated for. 

Because a faulty appliance or hazardous working conditions can cause serious harm to operators, the law grants them the right to seek judicial assistance. Worker’s Compensation Insurance benefits or coverage can compensate for lost wages, medical reimbursement, or death payments to the immediate family.

Commercial Auto Insurance

Auto insurance is one of the most common types of insurance required by small business owners. One reason for this is an increase in car or car parts theft – not to mention the all-time price inflation along with a rapidly changing economy. 

Commercial auto insurance also ensures that any damage caused by your car to any individual or their property is paid for when a legal case is filed by the victim. Auto insurance can cover any settlement fees, legal fees, or other liabilities incurred by the company vehicle.

Cyber Insurance

In our recent article, we outlined that 56% of small business owners are not interested in or concerned about purchasing cyber insurance. However, there is no reduction in reported cyber-attacks, which is making small business owners reconsider and rethink their security plans. 

Cyber insurance is an excellent way to protect yourself from online crime and stolen sensitive information such as a social security or credit card number. Small businesses get coverage for any legal fees or cyber extortion charges incurred by the client and also restoration of stolen data.

Business Owner Policy

Looking for a more comprehensive insurance policy model? Small businesses can rely on a business owner’s policy, which combines various types of coverage, such as liability insurance or commercial property insurance. However, the real requirement is calculated based on the nature of the business and the risk factors involved. 

BOPs are a great way to manage renewals and other formalities in a clubbed policy version while also keeping your insurance premiums in check.

Many other insurance policies can be added on to provide more comprehensive coverage. For example, purchasing commercial umbrella insurance can assist your small business in paying any additional costs that your policy does not cover. As a result, you will not have to use your business credit to pay for any litigation fees or settlements.

The Bottom Line

As a small business, you may need to determine which insurance is essential for your business model. This portfolio evaluation can be carried out by insurance experts. 

Gonzalez Insurance has worked with dozens of small businesses and has successfully helped them insure their business operations. Get in touch with us to get started and receive a customized quote for your business.