When you decide to run a small business, you’ll be responsible for all kinds of things. One of those responsibilities is going to be making sure that your enterprise is properly insured. You might have to get several different kinds of insurance too.
You want to make sure that your business is protected from all kinds of liabilities and risks. So keep on reading and we’ll take you through everything that you need to know to make sure that your business is properly insured.
1. Mandatory Business Insurance for Employers
There are many different kinds of business insurance that are required by law to protect your employees, your company, and yourself. The state that you work in is going to determine the insurance requirements of your business.
Many states require companies with employees to pay for state disability insurance, unemployment insurance, and workers’ compensation insurance. Your state might also require insurance for certain business activities.
Contact your local city government offices or reach out to the Department of Insurance for your state to learn more about the mandatory insurance requirements for small businesses.
If you don’t get the proper insurance then you might not be able to open your new business. If your business is already running and you don’t maintain or get the right insurance coverage, you risk losing your business license or paying big fines.
Obtaining worker’s compensation for part-time or full-time employees is required in most states. If you don’t comply with state laws then you can face serious penalties.
Workers’ compensation insurance supplements wages or salaries for employees who get injured on the job and can’t return to work. It also protects business owners from potentital lawsuits and provides permanent and temporary disability awards to injured employees.
It’s important to recognize the difference between freelance employees and W2 workers with regard to providing workers’ compensation coverage. Some business owners might require freelance workers to provide proof of insurance, for example.
Unemployment insurance is a joint federal-state program that provides cash benefits to eligible candidates. It’s administered by each state but states need to follow the rules that are set by federal law. Each state’s unemployment insurance program is funded by taxes that are paid by companies that operate in that state.
Your company pays for unemployment insurance with money that’s submitted through payroll taxes. A business that lays off more workers and has bigger payrolls will pay more into the state’s employment trust fund than those that don’t.
Disability insurance coverage lets business owners provide partial wage replacement insurance coverage to their eligible workers for non-related injury or sickness. This kind of insurance is only required in a few states, so you should check with your state’s Department of Insurance to see if this coverage is necessary.
2. Get a Business Owner’s Policy
A Business Owner’s Policy, or BOP, is an insurance package that covers all kinds of policies. Rather than looking for separate policies for different coverage areas, you can work with your insurance agent to make a BOP that’s right for your company’s needs.
Most of the time, you can also save money by buying a BOP instead of individual policies.
3. Review Your Coverage Regularly
Business insurance coverage requirements are going to change for a variety of reasons. That’s why it’s important for you to do a yearly review of your coverage with your insurance agent.
Your agent will be able to confirm that you have proper coverage, identify any new risks, and get rid of any extra parts that you no longer need. And because insurance agents value your company, they’ll look for ways to save you money at each review.
4. Get Liability Insurance
By having liability insurance, you’ll be able to protect yourself from lawsuits from suppliers, customers, and other people whom your company interacts with. Your insurance agent will be able to make recommendations about the level of liability protection that your company is going to need.
For the majority of small business owners out there who provide services to others, you’ll likely need professional liability insurance. Professional liability insurance is going to protect you against third-party damages related to omissions, errors, or malpractices that arise from your professional services.
In some industries and some states, professional liability insurance is required. It’s also referred to as errors and omissions insurance.
Your insurance agent is usually going to recommend that you buy general liability insurance. This is to provide additional insurance coverage for your small business.
General liability insurance protects your company against claims of property damage or physical injury caused by business products, operations, or premises.
5. Get Insurance Specific to Your Business
Some businesses need more specialized insurance packages. Because of this, you might want a policy that’s more tailored to the kind of business that you run. For example, if you’re a florist, then you should know why you need florist insurance.
The same can be said for a variety of business types out there.
The Importance of Knowing Tips for Making Sure Your Small Business is Properly Insured
Hopefully, after reading the above article, you now have a better understanding of how to make sure your small business is insured. By following these tips, you can better protect yourself, your company, and your employees from various risks and liabilities.
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