NYC Insurance Blog

Small Business Insurance Dos and Don’ts

Small businesses face problems such as natural disasters, lawsuits, workplace injuries, and cyberattacks. Depending on the severity, some perils can lead to huge financial losses, and in worst cases, business closure. Keeping this in mind, you need to protect your business from such challenges by purchasing the right types of business insurance. Take note that while some insurance policies are optional, others are a mandatory state requirement. Here is a look at different types of business insurance coverages.

Mandatory Insurance Policies for Businesses

The federal government requires employers to carry certain insurance coverages for their employees. This is to protect employees’ finances by covering the financial losses related to workplace injuries, unemployment, and disability. Terms surrounding these coverages vary by state. In most states, the following policies are mandatory: -

Workers’ Compensation Insurance – Also known as workers’ comp, this policy reimburses lost wages, treatment costs, and death benefits in case an employee falls sick, gets injured, or dies at work. Texas is the only state that does not require employers to buy workers’ comp for their employees. Even so, employers who don’t have this coverage must demonstrate their ability to pay for employee injuries out of pocket.

Unemployment insurance – This is a program in which eligible individuals receive cash benefits every week or month for the period they remain unemployed, mostly 26 weeks. On average, eligible citizens receive about half of their previous salaries as unemployment compensation. The purpose of this is to enable unemployed people to get by as they look for alternative employment.  Give our Agncy a call for a Quote today!

Disability insurance – This policy reimburses about 60% of a worker’s earnings in case the named worker is no longer able due to work due to a disability. The disability doesn’t have to be work-related for the affected employee to qualify for compensation. Disability insurance is mandatory in Rhode Island, Hawaii, New Jersey, California, and New York. 

Other Important Business Insurance Policies

As earlier said, your business is at risk of closure due to multiple perils. Fortunately, different insurance coverages can protect your business as follows: -

1. Commercial property insurance

As the name implies, commercial property insurance is a policy that protects your business assets, including buildings, equipment, and furniture. Commercial properties are usually at risk of damage due to fire, theft, vandalism, and natural disasters. Since perils are usually unforeseeable, having commercial property insurance will save you from paying for repairs and replacement costs out of pocket. 

2. Commercial liability insurance

This coverage protects your business against any form of third-party liability. For instance, if a visitor on your premises slides on a wet floor, falls and breaks his/her leg, liability insurance will pay for the resulting costs, including treatment and legal costs. This policy is necessary since every business is at risk of lawsuits and liability claims. Take note that depending on the nature of your business operations, you may need more liability coverage. For example, having frequent visitors increases your liability risk, and this means that more coverage is necessary. 

3. Commercial auto insurance

This policy covers all commercial automobiles. Specifically, it pays for the damage that occurs on business vehicles in case of an accident, vandalism, or theft. For example, if your company vehicle collides with another vehicle, this policy will pay for the cost of repairing the resulting damage or replacing the vehicle. Also, commercial auto insurance usually has a liability portion that covers third-party injuries and property damage. For example, if your company driver rams a business truck into a building, causing it to collapse, auto liability insurance is supposed to cover the damage caused.

4. Cyber liability insurance

This policy covers the financial losses that may emanate from cyberattacks on your company. It is advisable to have it, especially if your operations involve storing clients' confidential data. Every business in one way or the other collects and stores sensitive information from their clients or employees. And with the current increase in cyber-attacks, you should consider having a data breach coverage. Through this coverage, if a data breach occurs either through paper or electronically, your business will be covered. 

If you’re skeptical about this, imagine losing your valuable client records like health records to the bad actors, this can be detrimental to your business. 

Directors and Officers Insurance

Although associated with bigger companies, the directors’ and officers’ insurance protects your business from the directors’ actions that can jeopardize your business profitability. Even if you’re small business owner, you need this coverage to protect your business from the unforeseen characters of different officers within your organization.

Tips for making business insurance easier and cheaper.

Get a BOP

A Business Owner Policy is an insurance coverage package that covers different policies that you require in small businesses. Instead of seeking different coverage areas, you can ask for a customized and appropriate BOP from your insurance agent. Besides, this type of arrangement can help you save money in the long run. Always ask for option from your agent before signing up for anything. Let us give you a Quote on a Business Owner's Policy Today!

Review your coverage Regularly

Typically, business insurance requirements can change overtime. And this can be due to several reasons. Thus, it’s critical to carry out an annual coverage review with your agent to determine if you have enough coverage and to discard the extras that you no longer need. Additionally, you can use that opportunity to identify new exposures or risks that your business may face.

Note that every insurance agent values that clients and for that, they will do everything possible to ensure that your business needs and demands are met. Therefore, you need to engage them to get the best review ever that you need.

Final Thoughts

No matter the type of business that you operate, it’s clear that you need an insurance coverage to help you overcome the unforeseen miseries. Therefore, a small business owner, to be on the safest side and have your business running without issues, you need to have the most basic insurance coverages require by law in case you’re short in funds. However, if you have the required financial muscle, going for a BOP is a welcome move. Having a broker makes finding insurance much easier, Call us Today!

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