While the dollars may suggest that small businesses don’t have as much at stake as larger businesses to a person who owns and operates a small business everything is often at stake. Many save for years in order to come up with the capital to start a business, but them fall short of getting the business insurance they really need. Paying insurance premiums is an expense, but too many businesses have been forced out of existence because of a claim made against them or the destruction of business materials that could have been recuperated with the right business owner’s policy.
Types of Small Business Insurance to Consider
No matter how small your small business is, having some level of business insurance is important. There are many people who believe that having insurance isn’t necessary because they run their business out of their home. Many assume that their homeowner’s policy will cover whatever mishap that might come their way. This is not necessarily true, even if you don’t have any employees. Home based business owners may want to start by adding riders to their homeowner’s policy that would cover the loss or damage of materials. Liability related to your business, such as selling a faulty product, needs to be covered in its own policy as it is not going to be covered in the same way as someone might be covered if he or she slipped on the sidewalk in the winter.
Business Owner’s Policies
One of the easiest places to start when selecting small business insurance is to pick out a business owner’s policy. Business Owner’s Policies (BOPs) bundle together property and liability insurance into a single package. Insurance providers may also sell each type separately as well in case the business owner is looking for extra protection in one area over the other. BOPs are targeted primarily to small and medium-sized businesses since larger companies usually need a more detailed commercial policy that addressed their unique needs and risks.
A BOP Typically Includes:
- Property insurance for buildings and anything inside that is owned by the company. Different levels of coverage are available, which is considered either standard or special It is important to explore what your business really needs and be sure you understand just what your policy covers.
- Business Interruption Insurance that offers some compensation during a time when it is recovering from tragedy and cannot operate normally. Some policies cover temporary relocation expenses so that these interruptions can be kept at a minimum.
- Liability protection to take care of their legal responsibilities when the business causes harm to others through injury or damage to property. It applies to actions or the absence of action by the business owner or their employees that occurred due to service errors, product defects, or faulty installations.
Add on Policies
For many business owners, a standard BOP will not offer enough coverage to prepare them for whatever unfortunate situation comes up. It may not even take care of their legal responsibilities. Wisconsin law requires businesses that employ others to provide unemployment insurance and worker’s compensation insurance. Both of these will need to be added on separately. It is also beneficial to offer health and/or disability insurance as well. Vehicles that are used for business purposes are not covered under most standard auto insurance policies, so the coverage on these vehicles will also need to be reviewed and updated.
Defining Your Game Plan
Just as you need to have a good business plan in order to give your business the best chance at success, you also need to sort through that plan to determine your level of risk in various areas and decide what needs the most coverage. At Frydach Insurance, we are a small business ourselves and we not only have a strong sense of what types of coverage are available for small businesses, but we can help you look at the bigger picture and explain what different provisions of your policy might mean. Our connections with a wide variety of insurance providers and their policies will ensure that you make an educated choice on a provider and policy that is right for your business. If you think your business owner’s policy might have gaps in it, we’d be happy to take a look. Contact Frydach Insurance today to start reviewing your possibilities.