Insuring your small business isn’t as simple as picking an agent and buying a handful of policies. Before you get started, you need to understand state and federal laws, identify your coverage needs, and learn what certain policies cover.
If you currently have more questions than answers about small business insurance, you’re in the right place. Keep reading to learn about small business insurance, how it works, and why you need it.
It’s easy to get overwhelmed by all your small business insurance options. However, most businesses only need a few policies to protect their finances and future. Here’s a brief explanation of the most common commercial insurance types.
It doesn’t matter what type of business you own—you probably need general liability insurance. This coverage helps you pay for lawsuit costs when a customer or competitor sues you for the following:
- Bodily injury occurring on your premises or caused by your products
- Property damage resulting from your services or products
- Personal and advertising injury
As a small business owner, general liability insurance is probably the most critical coverage you can purchase.
If you own or rent property for your business, you need property insurance. If you suffer a loss event, your policy will pay to repair or replace your damaged building, furniture, fixtures, signs, and other covered items.
Workers’ compensation coverage pays for your employees’ lost wages, medical bills, and rehabilitation costs if they suffer work-related injuries or illnesses. Every type of business benefits from workers’ compensation insurance, but it’s especially important for companies in high-risk or dangerous industries.
If you or your employees operate any motor vehicles for work, you need commercial auto insurance. Your policy pays to repair or replace your vehicle following certain loss events, and it also covers lawsuits and damage to other drivers’ cars after an accident.
Depending on your business, you might need some or all of the following additional coverages:
- Umbrella liability
- Directors and officers insurance
- Cyber liability insurance
- Professional liability insurance
- Employment practices liability insurance
An experienced insurance agent can help you determine if you need supplemental small business insurance policies.
In many cases, purchasing small business insurance is optional. However, your state most likely requires you to purchase workers’ comp coverage. Every state except Texas mandates workers’ comp insurance in some capacity, but you may not need a policy if you have fewer than five employees.
You might also need a specified amount of commercial auto insurance, depending on the state your company resides in. Additionally, you may need liability coverage to receive a state license, such as a liquor license or medical license. If you’re unsure whether or not you need a specific type of coverage, check with your state.
Now that you understand state requirements for small business insurance, you may be wondering about federal health insurance laws. According to the Affordable Care Act, any business with 50 or more employees is required to offer health insurance.
Small employers don’t have to purchase group health insurance, but they can receive tax credits for doing so. As a result, many small business owners buy policies for their employees.
As a small business owner, every dollar counts. So, you’re probably wondering: How much will my small business insurance cost? Unfortunately, there’s no way to know without consulting an insurance agent because the answer depends on your business type, policies, coverage amounts, and claim history.
Small business insurance is complicated, and you’ll only have more questions as you start getting quotes. If you want a team of insurance experts to guide you through the process and help you make the right coverage decisions, partner with Southpoint Insurance.
Our experienced service team consults with every client to understand their unique insurance needs. Then, we create a custom insurance plan and gather affordable quotes from the most trusted insurance companies. We understand that finding insurance can be overwhelming, and we’re here to make the process as simple as possible.
If you’re just looking for a cost-effective workers’ compensation quote that meets your state’s requirements, we offer an innovative online quoting tool. After entering a few details about your company, you get a CompWerks quote within minutes.
Do you want to learn more about our quoting tool or the coverages we offer? Get in touch with our team today.