Own a small business? Then you know it’s a juggling act. In addition to sales and growth, you have to protect your investment from potential exposures. Because there’s so much on the line, having the right business insurance protection is crucial.
Wondering what you need? Here’s a rundown of common small business coverages to consider:
- Property. Naturally, you need to protect your tangible investment – your building, office furnishings, inventory, equipment and other property vital to your business operations – in case of loss or damage from fire, theft or other common perils. Some property insurance also covers equipment breakdown, removal of debris following a fire or other event and certain water damage. Business Interruption (BI) insurance can be added to your commercial property policy to protect your revenue in the event damage from a covered loss causes a slowdown or suspension of your operations. From the time of the loss to when operations are restored, BI insurance helps replace lost profits and pay continuing expenses like rent and payroll.
- General liability (GL). The GL policy is a staple of business insurance coverage. It helps protect your business against liability claims made by third parties for bodily injury, property damage and personal and advertising injury. For example, if a customer slips and is injured on your premises, a GL policy can help cover the customer’s immediate medical expenses and the associated legal costs for your business if the incident leads to a lawsuit.
- Commercial auto insurance covers costs to third parties resulting from bodily injury or property damage for which your business is found liable (up to your policy limits). Physical damage coverage can also pay to repair or replace your vehicle if it’s damaged from an accident, theft or flooding. If you plan to use your personal vehicle for your business, you still need business auto insurance because most personal auto policies exclude coverage for business use.
- Workers’ compensation. If you have employees, you may not be required to carry workers’ compensation insurance in Texas, but it is still highly recommended and you’ll need it in any other state. This coverage can protect you if an employee is injured on the job and helps pay for medical care and a portion of the employee’s lost income.
- Specialized liability protection. Liability lawsuits are more common and settlements are higher than ever, so make sure you’re protected from all sides. If your business involves providing advice, making recommendations, designing products or providing physical care, you’ll want to consider Errors & Omissions/Professional Liability coverage, which covers judgment against you for which you’re found legally liable (up to your policy limit), and legal defense costs. If you have employees, think about Employment Practices Liability Insurance (EPLI), which provides coverage against claims made by employees within strict time limits for violating their civil or other legal rights. Finally, if you manufacture or sell products, you should consider Product Liability insurance (if coverage isn’t already included in your GL policy) to protect you in the event you’re sued for a defective product that causes injury or damage.
- Cyber/data breach. Cybercrime is one of the fastest growing threats to businesses of all sizes, and cyber insurance can cover the associated legal and other costs if you become the victim of a data breach or other cyber-crime.
Although this list isn’t exhaustive, these are some of the most common types of business insurance coverages you’ll want to consider for your small business. Insurance is complex, and nearly every business insurance policy has exclusions, so it’s crucial to work with a professional who can help you thoroughly understand what you’re getting – and what you’re not. Contact the Texas business insurance professionals at Higginbotham to discuss your coverage needs.