4 Insurance Policies That Can Actually Boost Your Small Business

By the SBA’s last tally, there are 28 million small businesses in the United States, and the Bureau of Labor Statistics puts the number of “nonemployers” (that is, one-person operations) at about 40.5 million.

All of these small businesses are great for the economy, but there’s a catch: They mean more competition for you.

A surprising way to separate yourself from the pack? Carry small business insurance. The right policies can help you win leases, land clients, and stay ahead even when the unexpected happens. These four gems will give you a particular edge.

Think of general liability insurance as the handyman of coverage—it can do a lot of odd jobs and make your life easier. It offers a base layer of liability protection against common lawsuits, but perhaps its biggest selling point is that it can help pay for damages when someone is hurt on your property.

Why you need it: Accidents happen all the time. And when visitors, customers, vendors, and deliverymen wander onto your premises, their physical safety is on you. One slip, trip, or fall, and your business could be on the hook for their medical expenses and lost wages.

How it helps you get ahead: General liability insurance makes sure those costs don’t come out of your pocket. What’s more, you may need it to open your doors in the first place; landlords often require it in leases. They want assurance that you can pay for accidents on your property so that injured parties are less likely to come after them.

If you make a living off your expertise—in IT, architecture, business consulting, real estate, or any other service-focused industry—professional liability insurance is a no-brainer. This policy can help pay for legal expenses when a client sues you over the work you deliver. And let’s be clear: You don’t have to actually do anything wrong for a client to get upset and sue.

Why you need it: You might be an ace in your field with decades of education and experience, or a brand-new entrepreneur trying to make a name for yourself. Either way, top-paying clients usually ask to see proof of professional liability insurance. Why? Because they know can recoup losses from your policy if a project is overdue, flawed, or over budget.

How it helps you get ahead: Client contracts, baby. As mentioned earlier, bigger, higher-paying clients are likely to require professional liability coverage. If they’re on the fence between an insured business and a competitor who doesn’t have coverage, guess who’s more likely to land the gig? The one who has proof the client won’t lose money by working with them. A professional liability policy can also help a less-established business build credibility. It shows that your business is stable enough to qualify for coverage (insurance companies vet their risks) and that you’re generally savvy and financially solvent.

If you have employees, you know about workers’ compensation. It’s the policy that helps pay for medical expenses and replacement wages related to workplace injuries.

Why you need it: Most states require you to carry this policy as soon as you hire full- or part-time employees. Some states even require it of non-employer businesses in certain industries (mostly construction). Each state has its own spin on workers’ comp laws, so your obligations depend on where you operate.

How it helps you get ahead: Remember how I said most states require this policy? I wasn’t joking. In much of the country, you get hit with fines for each day you fail to meet coverage requirements ( in Illinois , for example, fines are $500 per day, with a minimum fine of $10,000); in California , you can get fined and ordered to serve jail time.

When you invest in something, chances are you want to protect it. So when you buy a new piece of equipment or spring for commercial real estate, you will want to get a commercial property insurance policy. Most policies can cover damage caused by windstorms, fire, theft, and vandalism—all pretty common events.

Why you need it: Just as you might need homeowner’s insurance to get a mortgage for a house, you may need property insurance to buy or lease an office or storefront. If you rent, your policy can protect all your stuff inside the building. If you own, it can protect the building, too.

How it helps you get ahead: FEMA estimates that 40 percent of small businesses never reopen after a disaster because of high cleanup and repair costs. With property coverage, you have the means to recover from a devastating event and be ready for the next opportunity that comes along.

Few things in the business world are predictable, but with the right insurance policies , you have the peace of mind to know that your business is primed for growth, compliance, and recovery no matter what.

Post by: Ruth Awad

Ruth Awad is a content strategist and editor at Insureon , the nation’s leading online small business insurance agency. She regularly writes and thinks about risk management.

Company: Insureon
Website: www.insureon.com
Connect with me on Twitter and LinkedIn.

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