When you start a small business you need to have insurance—it’s a simple fact. But before you buy small business insurance, it’s wise to shop around for the best rates and to ensure that you have a clear understanding of what needs to be covered.
When looking for a small business insurance quote, there are some things you will need to know.
• The Nature of Your Small Business: There are some types of businesses that many insurance companies decline coverage, like amusement parks, aviation businesses and security companies. The good news is that there are small business insurance companies specializing in these areas, you just need to seek them out.
• Your Address and Building Specifications: When shopping for quotes, you’ll need to state if your business is run out of a home or a commercial location and answer some additional questions. If it is a commercial office:
- What is the total customer area?
- What is the age of the building?
- What types of tenants occupy the building?
• Chemical Storage: If you use chemicals in your small business, some carriers will want to know where the supplies are stored. If you are a mobile service and the chemicals are stored in a vehicle, you need to specify where the vehicle is parked.
• Company Overview: Insurance agents will also ask you how many years you have been in business, your projected and current gross annual receipts, plus the number and nature of employees.
• Business Vehicles: If you have mobile service vehicles, you will need names, social security numbers and drivers license numbers for all employees who drive the vehicles. In other words, you need to provide as much information as you can.
What You Need to Cover with Small Business Insurance
• Health Insurance: If you have just left your current job to start your own small business, you may be eligible for Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA will provide interim coverage while you search for your own health insurance policy. It also gives workers, and their families, who lose their health benefits the right to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances.
• Disability Insurance: Disability insurance will guarantee some income, should you suddenly become unable to work because of injury or illness.
• Life Insurance: Life insurance will help ensure that your family has the funds it needs should you meet with an untimely death. Some lenders require that you have life insurance before they issue a loan.
• Business Property Insurance: Business property insurance protects you against loss of inventory or equipment in a flood, fire or other disaster.
• General Liability Insurance: Comprehensive general liability insurance is also necessary for your small business if you plan on having clients or customers at your home. Whether you hold meetings, sell merchandise, or have members of the public enter your home for any other reason. This insurance will protect you if someone is injured on your property. The insurance will also pay for your legal defense should you face a lawsuit.
• Business Interruption Insurance: Business interruption insurance will help your business recover from natural disasters, cover you for income lost during the disaster and will pay for operating expenses that continue to accrue.
• Workers’ Compensation: This is vital if you plan on having employees working out of your home. Without workers’ compensation, you will be responsible for any medical expenses arising from injuries employees sustain while working for you.
While getting quotes from reputable insurance carriers, it’s also a good idea to check out your local independent insurance agents as well. But most importantly, do not think about small business insurance as an extra expense, but as a key part of your business operations, providing valuable protection that can save your small business down the road.
See how much you could save today on your insurance. Get your free business insurance quotes today!