When you own a small business, there are all kinds of daily to-dos you need to plan for and future goals you want to focus on.
Mistakes and accidents could take your attention away from that growth. It’s important to have the coverage your business needs to protect your bottom line and your reputation.
Why you need insurance
The right insurance policies can protect your business from financial losses after injuries, property damage, theft and other unexpected events that could otherwise cost you a lot of money.
If you aren’t covered, those situations might send your business off track.
Your local government might also require basic coverage or certain types of coverage before you can do business. You’ll want to check with your state’s department of insurance or financial services to understand their requirements.
In addition to state laws, your clients could ask for specific coverage to work with you, especially if you plan on working on high-value contracts or with government agencies. Often, they’ll require you to provide a certificate of insurance.
Types of insurance
The kind of coverage you need also varies by industry and other factors like equipment, employees and clients.
These are the most common types of business insurance:
General liability. Most business owners have a general liability policy to help cover the most common risks, such as injury to someone other than an employee or damage to someone else’s property. It can also help pay for legal defense and judgments if a client accuses you of libel, slander or copyright infringement.
Workers’ compensation. Most states require you to purchase workers’ comp insurance if your business has employees. It can help cover medical bills and lost wages if you or an employee get hurt or sick on the job.
Commercial auto. Your personal auto insurance policy might not be enough to protect the vehicles you use in your business. This type of coverage can help pay for injuries and property damage due to an accident.
Professional liability. Also known as E&O insurance, this type of coverage is designed to help if a client accuses you of making a mistake that causes financial harm. It can cover settlements and judgments if you’re determined to be at fault and help pay for legal and court costs to defend against a claim — even if you didn’t do anything wrong.
When to buy insurance
If you are just starting your business, you’ll want to get insurance coverage as soon as possible (and before you start providing services) so that you’re protected from the start. Even if you’ve been in business for a while, you might want to look at your insurance policies and make sure you’re covered for everything you need.
As your business grows, your insurance needs could change, so it’s a best practice to frequently review your coverage.
You might want to take a fresh look at your insurance package if:
- You have a noticeable shift in revenue (decrease or increase)
- You’ve added products or services
- There’s a change in the number of employees, vehicles or specialized equipment
- You’re doing business in a new location
By answering just a few questions about your business with NEXT’s instant quote process, you’ll get policies customized to meet your needs and you can be insured in less than 10 minutes. Plus, you can save up to 10% more by bundling policies.
NEXT is 100% dedicated to small businesses and the self-employed. They provide affordable business insurance tailored to your industry and business, making sure you’re not overpaying or under-insured. It’s simple, fast and easy.