Small Business Owners: Six Things To Make Sure Your Insurance Covers

Every business needs to have insurance. Without it, there is no way to protect the company you built and the livelihood you earn in the event of an accident. With that in mind, the following are a few of the essential things you should be sure your small business insurance offers:

Basic Cover

For basic coverage, you will need general liability insurance. This will protect your business against accident, injury or negligence claims. If someone gets hurt on your premises, this policy will cover attorney fees and medical expenses. Basic coverage will also pay for damages caused by a business owner or his or her employees and claims of copyright infringement, slander, and false advertising.

Product Cover

If your business involves production or the handling of products, then you will need product liability insurance. This coverage applies to your small business if you manufacture products, distribute them, or sell them. It will cover any losses related to defective products.

Service Cover

If you do not need product liability insurance, then your business is probably a service. If this is the case, you may need professional liability insurance. Examples of service businesses include hair salons, consultants, insurance agents, real estate agents, accountants, lawyers, and notaries. If your business is one of these or similar, this insurance will protect you if a customer makes a claim of negligence or malpractice. Your general liability insurance will not cover these types of claims.

Property Cover

If your business is related to property, then you will need commercial property insurance. This protects a business that has tools, equipment, office space, or buildings. It will cover loss or damage caused by vandalism, smoke, fire, and so on. You may also consider getting business interruption coverage. This will cover you if you are unable to run your business because of extensive property damage—for instance, if you had a fire, you may not be able to work in your building for an extensive period of time while it is being renovated.

Home Business Cover

So far we have talked about traditional businesses, but if you have a home-based business, you will also need some good insurance. Your regular homeowners insurance will not help you if there has been damage to your home office. If your business equipment is stolen or damaged—your computer, phones, fax machine, etc—you will need a rider to your existing homeowner’s insurance. Usually, advises a Calgary insurance broker, a policy that offers additional coverage of $2,500 should be enough.

Business Owner Cover

Finally, consider getting a Business Owner’s Policy if you need more than $10,000 worth of insurance. This will cover a broad spectrum of things that could go wrong. For example, it will cover you if you have an accident while driving your personal vehicle for business, if your business is interrupted by a loss, if a client sues for malpractice, if a customer is injured on your premises or because of your equipment, or if there has been theft or damage to your business equipment.

Besides getting protection through insurance, you should choose a formal business structure to separate your personal assets from your business assets. If your small business is a sole proprietorship or a partnership, you are personally responsible if someone sues your business. The way to limit liability is to create a corporation, a limited liability company, or a limited liability partnership.

Informational Credit to Thomson Schindle Green Insurance & Financial Services Ltd