Every business faces some risk, whether it employs one worker or 100. Small business insurance protects small business owners against unexpected business costs. Lawsuits, accidents, and natural disasters can cause financial ruin for businesses that do not have adequate insurance coverage.
Fortunately, there are many policies available that can protect against nearly every type of bodily injury or property damage that could occur. Before purchasing small business insurance, it is essential to understand what policies are available and what value they can deliver to small business owners.
Learn more about small business insurance, what factors influence rates, and how business owners can determine what types of insurance they need to safeguard their investment.
What Is Small Business Insurance?
Hard work can go a long way toward growing a successful business. However, business owners need more than ambition to keep their businesses protected and profitable.
Small business insurance policies are designed to help cover claims if a business causes accidental injury to another person or damages another person’s property. It can also help businesses protect against damage to their property and assets.
There are many reasons why small businesses choose to purchase insurance. Small business insurance can help protect businesses from the expense of accidents and losses, expensive lawsuits, property damage caused by natural disasters, and the death or injury of a key team member.
In some cases, purchasing an insurance policy may be mandatory. For example, most states require businesses to purchase workers’ compensation insurance.
Having adequate insurance can also help businesses build trust and gain more clients. Many customers will choose to work with companies that they can rely on.
Maintaining adequate insurance coverage can help reinforce customers’ satisfaction and give them peace of mind that they will be taken care of if anything goes wrong. Small business insurance can also attract and retain top talent, as people prefer to work with companies that protect their safety and interests.
What Factors Influence Insurance Rates?
Many factors can influence small business insurance rates, including what type of policy is being purchased. When it comes to general liability insurance premiums, insurance companies will typically look at the building size, location of the business, claims history, and the size of the business’s payroll and annual revenue.
Policy details like deductibles, coverage limits, and other details can also impact business insurance costs. When calculating rates for commercial property insurance, an insurance company will generally look at the business’s location, building age and size, and types of perils that need to be covered.
For example, some businesses may need additional coverage to protect against floods and earthquakes. The insurance company will also consider the total equipment cost the business owns or leases when administering the total compensation.
Suppose a business is forced to close due to a covered loss temporarily. In that case, a small business may purchase business interruption insurance to replace the lost income and pay operating costs during this time.
When calculating premiums for business interruption insurance, the insurance company will typically look at the industry the business is in, the total amount of revenue, and the business’s property value to assess the proper coverage.
The higher the property value, the more a business will usually pay for business interruption insurance.
What Type of Insurance Does a Small Business Need?
Small businesses do not need every insurance available but can significantly benefit from purchasing policies that align with their unique industry and needs. Some types of small business insurance policies that businesses should consider acquiring include:
Business Owners Policy (BOP) Insurance – BOP insurance provides small business owners with enhanced general liability and property coverage. General liability coverage protects businesses against third-party bodily injury and property damage claims, product liability claims, and advertising-related injuries.- Commercial Auto Insurance – A commercial auto insurance policy helps cover vehicles used for business purposes, such as trucks, cars, and vans used to transport or deliver goods.
- Commercial Property Insurance – A commercial property insurance policy can help pay to replace or repair damaged, lost, or stolen business property resulting in a loss. This policy typically covers a business’s physical location and assets, such as equipment.
- Commercial Casualty Insurance – With commercial casualty insurance, small business owners are protected against loss due to injuries to people or damage to their property.
- Commercial Umbrella Insurance – Commercial umbrella insurance provides excess liability above the limits of liability of other commercial insurance products.
Insure Your Small Business with Atlas
Having the right small business insurance can help prevent growing businesses from suffering significant losses that can interfere with their operations or force them to close their doors.
Reach out to the insurance professionals at Atlas Insurance Agency today to learn more about our business insurance offerings or to get an insurance quote for a business insurance policy.