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What insurance do you need for your small business?

If you are a small business owner or just contemplating opening a small business you may be asking yourself if you have the business insurance you need. Having the right business insurance can sometimes mean the difference between a business that thrives and one that is lost completely.For this reason alone small business owners would do well to seriously consider if they have the right insurance for their business. Business insurance can help you hold onto what is really important. Even as the owner of a small business you personally cannot control or eliminate every potential risk that threatens your livelihood. Business insurance can provide the protection against these risks but only if you carry the right kinds of business insurance for your small business.

Unfortunately, insuring your business will not be as simple as insuring your car. Because your business is unique, you will need to design a package of insurance that meets your business needs and at the same time provides the level of protection you are comfortable with. Your first decision will be to decide which types of insurance your business needs.There are many different types of business insurance that small businesses might need these can include property insurance, professional liability insurance, disability insurance, and business interruption insurance. Insurance and financial experts advise that there are two types of business insurance that all businesses need which are: property and liability insurance.For the purpose of this article we will limit our discussion to property and liability insurance.

Property insurance protects all of the assets your business owns, including the building and equipment, from destruction or damage. Even if you are running a home-based business and have home insurance, you will still need to protect your business assets with separate contents insurance; since your home owner's policy will not cover business equipment. You should check with your insurance agent for the specifics of coverage in any policy. In addition to your property insurance contents insurance protects your business equipment from perils such as fire, flood, or theft. To determine how much property or contents insurance you will need, it is best to create an itemized list of your business' assets and their individual dollar values. Then you can decide which assets you actually want to insure and for what value, which will then determine the insurance premium.Keep in mind that in some instances, you may decide against insuring a particular asset, because it just does not warrant the cost of the premium. Yet in other cases, the premium may be well worth paying.Each small business owner should ask themselves, if this equipment, such as a computer, was stolen, would I be able to afford to replace it? If the answer is no, you should then insure it.

Liability insurance is also crucial, no matter how small the business. This is a kind of insurance no business should be without; since its purpose is to protect your business from being sued. General liability insurance will protect your business from liability arising from negligence that may cause injury to others, such as a customer or employee. It can also protect your company if someone is injured as a result of using your product or service. When you consider that the legal expenses and settlement or judgment expenses of a single lawsuit could drive your business into bankruptcy, you will quickly see why this kind of insurance is considered a "must-have". In addition if you sell manufactured or assembled goods, you should check and see whether or not your general liability insurance policy also covers product liability. If your policy does not cover you will want to add this type of specific liability insurance to your package.

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