What Does Small Business Insurance Cover?

As a small business owner, you know the importance of insurance coverage for your business. It helps protect you from financial losses and against specific risks covered by the policy which typically includes fire, wind damage, lightning, falling objects, theft etc.  A normal policy will offer 3 basic types of coverage.

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General Liability Coverage

General liability will cover the medical costs if anyone is injured at your business place due to negligence. Depending on the policy terms, it may also pay for legal costs if you should besued over an accident that occurred at your place of business. General liability coverage is subject to limits. If the medical expenses are in excess to your coverage limit, you may have to pay from your pocket to cover the balance.

Business Property Coverage

Property coverage will protect the business premises (if you own it) from risks that are listed in the policy. For example, if the premises are damaged or destroyed by fire, the policy will help to pay for the repairs or rebuilding. If the furniture or equipment is damaged, destroyed or stolen, the policy will cover the cost of replacement or repair. When buying a small business policy it is important to choose the right deductibles and limits. This means that you can select the amount you will pay yourself before the policy kicks in, and the maximum amount that the policy will pay. As a general rule, higher the deductible, lower the premium.  Because of cash flow limitations, many small businesses make the mistake of keeping deductibles and limits low to reduce the premium outflow. However, saving a few dollars a month could result in paying thousands of dollars from your pocket if damage or loss occurs that is not covered. An insurance agent will be able to help you find the optimal coverage for your business.

Business Interruption Coverage

This will help you to continue operations after a covered peril occurs. It is meant to help in replacing lost income and the higher expenses that arise after your business operationsare affected. For example, if your premises are not usable after a fire, the coverage will help in paying rent for a temporary workplace. This coverage is subject to limits both in terms of the overall dollar amount payable as well as the time period for when it is applicable. Your insurance agent will be able to give you a clear picture of what the limits are to help you to find additional coverage, if you should need it.

Additional Coverage

In addition to these 3 basic coverage, it is often possible to buy additional coverage which can include:

 ·         Data compromise coverage

 ·         Employment practices liability coverage

 ·         Business auto insurance

 ·         Outdoor property coverage

 ·         Equipment breakdown coverage

 ·         Product liability coverage

 ·         Professional liability coverage

Ensure You Are Protected

The loss of your business could have a severe impact on you, your family, and your employees. Small business insurance is a protection to your business and by extension, to the ones who depend on you. The variable coverage limits and options available mean that the best way to get the protection you need, at a cost you can afford, is to consult a professional insurance broker.