Donna Reade

Specializing in Consulting, Training, E-Commerce Solutions & Bookkeeping for QuickBooks Online

Small Business Insurance: What Exactly Is It, and Do I Really Need It?

Small business owners don’t always recognize that running a business of any type involves a certain amount of risk – even if the service you offer involves little more than a desk and a laptop. If you haven’t done so already, you should consider taking steps to protect both yourself and the enterprise you’ve worked so hard to create by investing in some form of small business insurance.

Business insurance is mostly about protecting yourself financially. Whether you suffer a loss of property due to fire or theft, or your company is sued for negligence, money is inevitably going to be involved.

General Liability Insurance
There are a wide range of insurance types available to the small business owner, including everything from:
• coverage for your inventory and office equipment, to
• protection from mistakes made while providing your professional services

Regardless of the business you’re in, general liability insurance is the minimum amount of protection your company should realistically carry. Policy costs and coverage can vary widely however, and not every insurance policy is going to meet your particular needs, so take the time to seek the advice of a qualified agent or broker.

Let’s take a brief look at some of the other common types of small business insurance, and the circumstances under which they might just come in handy:

Property Insurance
It’s important to protect the property belonging to your company from loss or damage in the event of a fire, theft, or vandalism of your business premises. Commercial property insurance most commonly reimburses your business for such basics as inventory, tools, computers, and other office equipment, but can be extended to include everything from buildings, to loss of income resulting from interrupted earnings.

Professional Liability Insurance
Sometimes mistakes happen – especially if you’re in the business of providing professional services as a notary, consultant, or realtor, or you work as a hair stylist or technology provider. Having professional liability insurance becomes especially important when you’re charged with committing inadvertent errors or omissions (E&O) in the line of duty – including failure to perform, or responsibility for financial loss – because you won’t be protected by your general liability insurance.

Vehicle Insurance
If your company owns a dedicated commercial vehicle that carries product, equipment, or even employees, you should obtain specialized insurance to protect yourself against the costs associated with collisions or damage. A commercial vehicle insurance policy won’t protect you however, if your employees drive their own vehicles for business purposes and don’t have adequate insurance coverage when they run into trouble.

don’t make the mistake of assuming that just because you run a small business from your home, that your home-based insurance has got your back in terms of property damage, or professional or general liability issues. When it comes to protecting both your family and your business, the recommendation to be better safe than sorry can never be overstated.