Insurance guarantees protection from unforeseen circumstances. In same manner, Insurance coverage for Small Businesses guarantees the protection of the business from unforeseen situations like theft, fire outbreak, settlement fees and law suits which will ensure the continuity of the business. Although, nothing is 100% guaranteed, but to increase the degree of protection of Small Businesses from unforeseen mishaps, this article has been clearly written for the players in the sector of Small and medium scale enterprises (SMES).
Why Small Businesses Need Insurance Coverage
Insurance Coverage for Small Businesses is a necessity because of the fact that Small businesses are still in the preliminary stages of growth and any little mistake can easily stunt or end the business such as in cases whereby uncertainties like products vandalism are experienced. Imagine a small business owner who suddenly had an accident, if he has no insurance coverage for his business, it will be difficult for the business to continue. It is this insurance coverage for Small Businesses that will help cater for the medical bills, law suits and even settlements in a case whereby a second party lays complaints against the business owner.
Therefore, Insurance coverage for Small Businesses is what ensures the growth and the continuity of the business. There are different types of insurance coverage for Small Businesses. You will find them in the next segment of the article.
Types of Insurance Coverage for Small Businesses
It should be of note that since there are various kinds of Businesses, definitely, there would be different types of risks associated with each. In same manner, no one insurance coverage addresses the risks of all Small Businesses. This is why there are different types of insurance polices. Explained below are some of the common types of insurance coverage for Small Businesses.
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The General Liability Insurance
This type of insurance coverage for Small Businesses is also referred to as the business Liability Coverage or the public liability coverage. It is vital for every Small business to own this insurance coverage. This type of coverage covers the events of bodily injuries or damages done in the activities of the business.
This Coverage also covers claims of reputational damages such as copyrights infringement, libelling and slander. It helps cover for lawsuits and settlements where the insured is guilty and charged by a third party.
Small Businesses don’t enjoy the benefits of compensation, therefore, any affected business without a general Liability insurance will definitely pay out of pocket to settle such unforeseen situations whenever they arise.
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Professional Liability Insurance
This type of Liability coverage protects small businesses from claims related to work. Such claims include:
- Negligence
- Personal Injury such as slander
- Wrong advice
- Misrepresentation
The Professional Liability Insurance is also known by two aliases namely;
- The errors and Omissions (E&O) and
- Malpractice insurance
The E&O covers legal settlements relating to oversights, mistakes and breach of contract, among others.
It should be of note that the professional Liability insurance coverage doesn’t just cover the business, rather, it covers all the employees too, although not compulsory. It is advised that Small business owners have this insurance coverages particularly those committed to rendering services such as architecture, graphic designing, event planning, financial advisors, engineering, consulting, styling, software developing, and the list goes on.
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Product Liability Insurance
The product Liability insurance is the perfect insurance coverage for Small businesses committed to selling products. There are cases where a customer may raise a claim that the product of a small business injured him or her, thereby leading to incur legal charges. A business with this Liability coverage enjoys the benefits of having all legal costs settled while those without one will have to pay out of pocket. And we know it isn’t that easy to settle such bills as a small business owner without this insurance coverage.
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Commercial Property Insurance
To ensure a smooth operation, the insurance coverage of small businesses needs to insure its commercial Property, that is, the building where business is done in case there are injuries or damages done to the building. The insurance provider covers these costs.
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Health Insurance
According to law, businesses with over 50 workers as employees demand to have health insurance that will cover its workers in an unforeseen case of ill health. It’s the insurance provider that will cover the medical expenses if this ever happens to any worker.
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Workers’ Compensation Insurance
This insurance coverage is essential for a small business with at least one employee. The coverage caters to employees who got injured while carrying out the activities of the business. In this case, wages or salaries are reimbursed when the employee misses working days due to injuries.
There are numerous Policies for Insurance Coverage for Small Businesses, but the one explained above are very essential .
Considerations for Insurance Coverage for Small Businesses
When talking about the considerations of insurance coverage for Small Businesses, it means the present or future Premiums required to be paid by the insurance provider and also the monies paid out to the insured in a case whereby insurance claims are made. What this means is that the two parties provide simultaneous values.
Talking of the cost to buy insurance coverage for a small business, the average cost is about $57 per month based on data dated the 12th of February, 2024.
To conclude, it is not merely okay to have insurance coverage for Small Businesses, but rather, securing the right one that will benefit both the business and business owners when the time comes for insurance claims in the nearest future. The future we talk of might just be around the corner, so it is mandatory that as a business owner, you do your due diligence by comparing numerous insurance policies, their coverages and limitations before choosing the best for your business. This brings us to the end of our article titled insurance coverage for Small Businesses.
