Starting your own business is incredibly exciting. But there is a lot of things to organize.
One of those things is insurance.
Trying to navigate which types of insurance you need can be tough. However, this post will shed a little light on which policies you need in place and why.
The cost of small business insurance
There’s no one size fits all when it comes to insurance – for both big and small companies.
Some businesses will inevitably hold more risk than others. For example, a roof installation company is going to need different levels of insurance than a small flower shop. On the other hand, a hospitality company isn’t necessarily going to need the same insurance as a contractor.
How much your small business insurance will cost will depend on several variables such as revenue, location, industry, and whether or not you’ve made any claims in the past.
What insurance do I need for my small business?
Commercial liability insurance
This insurance will cover your business and its assets if your business is found to have caused physical damage to a third party. For example, a third party could be a property, an object, or a person.
If you rent your business premises, most landlords require liability insurance so that they know you can afford to cover the costs if you damage their property.
Commercial liability insurance can cost as little as $500 a year and cover you for anywhere between $1 million to $5 million in damages.
Commercial property insurance
Another type of commercial insurance your business will need is a policy that covers all your property, equipment, and stock.
Property insurance will ensure you can recover anything that perishes in the event of a fire, theft, vandalism, natural disasters, or even water damage.
Calculating the cost of this insurance will depend on whether your assets could easily be damaged (for example, if you work with a lot of glass) if your property or stock is a desirable item (that’s likely to be a good target for thieves) and if your neighborhood is a high-risk area.
Business interruption insurance
These policies are something that have been a real lifeline for small businesses trying to recover from the pandemic.
Business interruption insurance covers administrative salaries and profit losses caused during the time your business has been forced to shut. The reason for closure will need to be justified by your policyholder.
This type of insurance can usually be bought in conjunction with commercial property insurance to make things easier.
Cyber liability insurance
It’s no secret that small businesses that fall victim to cyber-attacks or online security breaches find it difficult to recover.
With cyber insurance, you are covered for these potential events. In addition, these policies can help you cover the costs of informing your clients, the time it takes to re-create any data that’s lost, the repairs needed for your IT systems, and any PR costs needed to repair your brand image.
For online businesses, this is certainly not an insurance policy to scrimp on.
These four types of insurance lay a security blanket down for your business to grow from. With these policies, you’ll be able to focus your time and effort on your thriving business rather than worrying about potential dangers that lie ahead.
