General liability, workers’ compensation, business interruption – with so many different insurance plans available for aspiring entrepreneurs, choosing the best one for your SMB needs can be tricky. To help you unravel the puzzle that is business insurance, we have made a list of guidelines for SMBs.
But first, let’s answer an important question.
Does Your Business Need an Insurance Plan at All?
The answer is yes.
Every business needs one, and for a couple of reasons. Most countries and states require SMB owners to carry at least a minimum insurance coverage, but even if yours don’t, having a good insurance plan can mean the difference between staying afloat and going down in the face of ill luck.
What Are the Different Types of Business Insurance?
The most common types of business insurance plans are:
- General liability insurance
- Product liability insurance
- Property insurance
- Workers’ compensation insurance
- Business interruption insurance
- Vehicle insurance
If you want to secure your business assets from property damage and your employees from work-related injuries, the general liability insurance will do the trick. You’ll need product liability insurance only if your company manufactures a product prone to potentially dangerous design flaws.
It’s not hard to guess what property insurance and vehicle insurance serve to protect, while business interruption insurance gives you a payout in the event that you have to pause your operation for a period of time. Lastly, workers’ compensation insurance secures your staff from workplace accidents.
How to Choose the Best Insurance Plan for Your Needs?
Insurance plans can be costly, so it may be smart for you to carefully evaluate your needs and, most importantly, your risk. Consider how many occupational hazards lurk in your field of work, as well as how safe and secure the location of your business is and the equipment your employees are using.
Here’s how to conduct risk evaluation, step by step:
- Take your organizational structure into account.
- Look at case studies for businesses similar to yours.
- Consult your lawyers and insurance agents.
Different organizational structures require different insurance policies – talk to your lawyer about what yours mean for you as an individual legal entity. Also, take a look at businesses similar to yours. In case you don’t have an insurance agent you trust, we recommend you contact Melton McFadden.
The more specific your niche is, the more you can benefit from reliable insurance agencies that can help you save a substantial amount of money by customizing or cutting certain policies. Otherwise, even the most basic and general insurance plan is better for your business than no insurance at all.