Small Business Insurance: Managing Risk

 A business owner needs to be prepared in the


event of a disaster.

When accidents, injuries, negligence, theft,

or other losses occur in a professional situation,

the business and their owners can often be

held liable for these losses.


What does it mean to be liable?

Liability is a legal responsibility to settle

financial debts or obligations to those affected

by a loss, typically in the form of a lawsuit,

which can total amounts greater than the business


is able to afford.

Business insurance exists to help pay for

these liabilities.

Business Insurance doesn’t prevent disasters

from happening: rather, it is a proactive

solution that protects you from liabilities

once a disaster has occurred.

Insurance prevents the cost of business mistakes

from leading to complete financial ruin.

This video will cover the primary types of

business insurance to help you protect your

assets and your business, as well as list

some of the more specialized policies available.

We will also share some agent resources to

help you secure the perfect insurance policy

for your small business.

Protecting Your Company from Liability

The term,“Business insurance”, isn’t

actually a specific type of insurance policy—rather,

it is a term used to describe the types of

insurance coverages designed for business

owners and their companies.

The specific policies and levels of coverage

required will depend on the size and type

of business you operate.

You don’t need to know all the details – a

qualified agent will help determine where

your liabilities lie and recommend appropriate

policies – but every business owner should

have a basic understanding of what coverages

are available.

Insurance is a standard cost of doing business,

and is relatively inexpensive compared to

the potential impact of a lawsuit– considering

that the cost of a single claim can decimate

a company, it’s the smart thing to do.

Let’s take a look at three of the most common

forms of small business insurance:


General liability insurance is the most common

type of business insurance, as it covers the

most basic needs that are shared among all

types of companies.

Things like bodily injury on your business’s

property and physical damage caused by employees

are covered by this policy.

If you aren’t sure which types of insurance

your company needs, you should look here first.

Bear in mind, General Liability does not cover

employee injury- which brings us to the next

common type of business insurance: WORKERS’


Workers’ compensation insurance (workers,

or workmans, comp for short) is meant to protect

the interests of your employees if they are

injured on the job.

It can also protect your business from a lawsuit

if that employee needs additional compensation

for their injuries.

If you have any employees, you’ll likely

need this coverage: almost all states have

laws requiring Workers Compensation Insurance.


Also known as Errors and Omissions insurance,

Professional Liability Insurance is a policy

that is meant to protect professionals in

the workplace.

Expert advice given to a client by you or

your employees may not always lead to the

desired result.

If your guidance is deemed inaccurate, negligent,

or fails to deliver agreed-upon results, it

can leave you open to liabilities if the client

is financially damaged and blames your company.

Professional Liability Insurance is essential

protection for providers of professional or

expert advice: Real Estate and Insurance agents,

financial advisors, and other coaches and

consultants can all benefit from this type

of insurance.

Aside from these foundational types of insurance

coverages, there are also more specific policies


They are typically specialized to match the

unique needs of different businesses.

Some of these include:

Commercial auto and property insurance, which

are similar to personal auto and homeowner’s

insurance, but for professional vehicles and


These policies protect owners against damages

arising from car accidents, fire, certain

natural disasters, and so on.

Business Interruption Insurance compensates

your business a percentage of lost revenue

in the case of a catastrophe and business


Product Liability Insurance covers physical

or other harm to a customer that is caused

by a product that you manufacture or sell.

Home-Based Business Insurance covers gaps

in your homeowner’s insurance policy if

you run a business out of your home.

And Data Breach Insurance covers some of the

damages in the event that your customers’

digital data is breached or stolen.

To simplify administration and save money,

you can consolidate your coverages with a

Business Owner’s Policy, also known as a


A Business Owner’s Policy is a group of

insurance policies tailor-made for small businesses.

These packages typically include general liability,

commercial property, and business interruption

insurance and can be customized to your business’s

specific needs.

In conclusion,

Your business needs insurance.

This fairly modest investment will protect

both your business and personal assets from

the inevitable liabilities that arise from

mistakes and disasters.

Now that you have seen the basic types of

business insurance policies, you can learn

more about each one in detail at our website.

Check out the links in the description below

for over 300 business ideas with detailed

insurance breakdowns of what policies and

coverage you will need.

We also provide recommended agent links to

speak directly with a specialist to help you

get the best rate on the policies your business


We are dedicated to providing the most useful

information for small business owners, and

would love to see your feedback in the comments

on what other information you need to help

follow your entrepreneurial dreams.

Visit us at


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