Starting up a small business can be an exciting venture.
They do need a lot of preparation to get them set up and running. Ensuring that your business has appropriate insurance to cover it is one of those important steps.
If I do not own business premises, do I need insurance?
Do I need to complement the social security benefits if I am self-employed?
We will run through the best small business insurance policies you should consider for your small business. Some professions, like engineering, will need certain types of insurance. Please check with an insurance lawyer.
It is important to have specialized advice on insurance for self-employed workers and small businesses.
You, as an entrepreneur, have experience in your own industry. It is about undertaking the best advice.
Insurance protects your business in case of various losses or situations.
But, how can you decide between several options of insurance? What is the best small business insurance right now?
There are two key questions to help with selecting insurance:
And after you have established that, the other important question is:
Once this is clear, be sure to:
Company insurance protects you against the different events that may arise in the day to day of our business.
As in all insurance, as the owner of a business, you can decide to insure every aspect related to the service or goods you sell.
Having an insurance policy that covers your business is so important. There is often an obligation to buy certain coverage types. If you are found uninsured it can lead to civil and even criminal penalties.
After knowing what steps you should take, it is important to know the types of insurance you could buy. There are varying levels of insurance and each one could be worth considering depending if you sell goods or sell a service.
This insurance is used to deal with any claim for damages to third parties caused by anything in the day to day running of the business.
It is recommended to be complemented with the Professional Liability insurance, as this is specifically for situations in which those damages to third parties are due to negligence or direct errors of the professional's performance.
This package covers any risk that damages the physical space where the business develops.
Obviously, it is possible to limit the type of problems that it includes, taking into account the geographical area and the incidence statistics.
For example, in a territory where episodes of torrential rain occur, it is worth having the flood coverage. But you may find tornado or wildfire coverage unnecessary.
This kind of insurance is basic and should be purchased by all businesses who employ 1 or more people. It is used to covers the medical expenses and lost wages that may result from an employee getting hurt at work.
It is important that you talk to your agent or insurance broker to get information that will cover your specific business. A business that works with animals and farm machinery will need higher levels of compensation than a low-risk office environment.
This isn't only for businesses that are dedicated to the transport of people or goods.
Car insurance is essential for any employee traveling for their work, who uses a company vehicle. All vehicles that the company owns must be insured for business use.
These types of policies offer more insurance coverage when the losses exceed the limits of your primary Civil Liability policy.
Umbrella coverage often applies to Commercial Liability or Civil Liability insurance for automobiles.
Like an umbrella on a sunny day, a general insurance policy is something you do not expect to use.
But, also like an umbrella, it is much better to have it and not need it than to need it and not have it.
For just a little amount of money a year, you can guarantee that in case of a legal situation arising with your business, you will have insurance covering your expenses.
That kind of coverage gives you peace of mind and will prevent the sale of premises or business assets in the case of a claim made against your business.
If you are ever the subject of a lawsuit, your homeowner's insurance or car insurance could provide you with civil liability coverage.
It could provide you with resources to pay legal costs for attorneys as well as compensation that the court will assign you to pay, up to the amount of coverage you have in your insurance policy.
However, in the litigant society in which we live, it is necessary to have an additional layer of protection.
This is the function of umbrella civil liability policies.
This coverage comes into action once the lower coverage limits on which it provides additional layers of protection have been reached and exhausted.
It also includes coverage against defamation claims or insults that you may be accused of.
For around $150 to $300 per year, you can add one million dollars of additional liability coverage.
Acquiring one million dollars more coverage can cost another $75 in annual premiums and, thereafter, can cost you about $50 more per year.
Since the umbrella liability policy comes into effect once the policy limits on which it is based have been reached and exhausted, most insurers ask that you already have civil liability coverage.
This coverage usually is within your insurance of at least $250,000 and about $300,000.
Basically, this type of insurance works just as an extra coverage above the basic limits of your normal insurance, be it work, housing or car insurance.
This type of insurance protects you against expenses related to a lawyer or judicial process.
There are people who do not need it, but this type of coverage has the ability to take away great financial worries.
The umbrella insurance policy becomes effective once you have reached the limits established in your other policies (work, home, apartment, or car).
This policy is also able to cover the costs of what is excluded in your other insurance. This includes protection against claims for damages, defamation, slander or dishonor and liability of rented properties.
It is very easy to find yourself in a difficult situation because you just don't have that kind of money. An umbrella insurance policy will help you from having the need to cover that expense all by yourself.
For example, the limits of your auto policy for property damage are $100,000. If you crash into someone's house, it will be covered by your normal basic civil liability coverage.
But sometimes, the price of the damages is much bigger than that.
If you do not have this insurance policy, you will definitely have to pay the remaining $50,000.
In contrast, with the umbrella liability insurance, all other parts of the claim will be protected by this coverage.
You must know that this kind of insurance is not needed by everyone.
BUT, it is the best small business insurance, as it can cover everything that you could possibly need and more.
Now that your small business is established or is beginning to rise, think about whether someone is likely to sue you. If so, are you prepared to cover these extra expenses?
Take a look at our advice and tips on purchasing an insurance policy.