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Covering Your Bases: 10 Types of Insurance No Small Business Owner Should Be Without

Insurance serves a purpose in so many different ways and the general idea behind paying for a certain type of cover is that when something goes wrong it should help to cover most of your losses and allow you to put things back as they were before, if that’s possible to do.

If you are running a small business there are several different types of insurance and coverage that you will need, but even if you do already have a policy in place, have you got all the bases covered if something goes wrong?

Here is a look at some of the types of insurance that will help you get on with business and let you concentrate on growing the company rather than worrying that your progress could be halted by an unexpected loss or unforeseen circumstances.

Public Liability is a must

If you are serving the general public as a tradesman, for example, it can only take a momentary lapse of concentration or something unexpected to happen for your business to find itself in a whole lot of trouble.

This could be if you cause damage to property and the owner wants you to pay, or it could be that a member of the public trips over a piece of equipment that you are using, there are numerous potential scenarios, but the end result could be a claim for compensation filed against your business.

You can read more here about what you get with public liability insurance and why it is so essential for your business.

Without that vital backup of insurance to protect your business you could quickly find that your finances could come under severe strain if someone makes a claim against you.

Every business needs to have liability insurance as a line of defence.

Protecting your property

As a business owner, it is possible that you may have your own building where you trade from and there will be all the contents inside that building that need to be protected from the threat of fire, theft, general damage, or even vandalism.

Take a look around at what you need to be able to run your business, such as computers, tools, and other equipment, plus a range of other items that you might take for granted on a daily basis but would soon miss if you didn’t have them.

Property insurance will allow you to protect your business against the financial loss that you would suffer if you had to replace these items or the building was damaged.

The ability to carry on as normal

Another aspect to property insurance that is also well worth considering is the chance to extend your insurance coverage so that you have a financial safety net if your business trading is interrupted and you suffer a loss of earnings.

It should be possible to add the loss of earnings and business interruption protection to your property insurance coverage and it could allow you to avoid a painful loss of income if your business is unable to trade as normal for a period of time.

Using vehicles for business

If you run a small business you may well depend on a company vehicle to help you get around and do your job or it could be that you use a vehicle for private and business use combined.

Whatever your circumstances are, if you rely on a vehicle to help you run your business you will need to make sure that you have the right type of cover such as commercial auto insurance.

This insurance protects the vehicle and your or your employees who are driving it, and you can also get coverage that extends to any equipment or tools that you are carrying around.

Injured on the job

If you employ workers in your business it is essential that you have insurance that protects against the prospect of an employee getting injured on the job.

Workers Compensation insurance is designed to cover their wages and medical benefits if they suffer an injury and are unable to carry on doing their work for a period of time.

It is normally the law in most states to have Workers Compensation insurance and financial penalties for businesses who don’t have this coverage when they should are often severe.

Professional protection

If you are a recognized professional with qualifications there are always standards of work that you will be expected to adhere to.

It should be remembered that there is a difference between general liability insurance and professional liability insurance and if you are offering professional services, you need the right cover.

Also known as Errors and Omission insurance, the policy is designed to provide defence and damages protection if someone sues you for not meeting professional standards.

Handling customer data

In a digital world where everyone is storing data and recording sensitive personal information, there is a real possibility of a data breach at some point if you are not careful.

You are responsible for protecting personal information that is given to you and if there is a data breach and that information is compromised it could be very costly to your business.

A Data Breach policy will help provide your business with financial protection if something goes wrong.

Protection from a legal situation

Being a director or officer of a company comes with responsibilities and if someone’s actions affect the operation or profitability of the business, there is a policy that is designed to provide legal protection coverage if that director or officer has to defend their actions in court.

Directors and officers insurance could prove invaluable if you end up facing a lawsuit.

Everything you need in one policy

If you are a business owner and are a bit bewildered by the choice of insurance options available it might be that a Business Owner’s policy might take the strain.

This policy is designed to give you every aspect of insurance you need in one package, and by combining them it could even save you money.

Best to check thoroughly that everything is covered through before you take this route.

Life insurance

Last but not least, you need life insurance to give you the comfort that your loved ones will not have to face an uncertain financial future when you are gone and the business goes with you.

Now is a good time to review what insurances you have and check whether you have the coverage you need to run your business and cope with a financial curveball that comes your way.


Arnel Ariate is the webmaster of Money Soldiers.

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