6 Tips For Finding Small Business Insurance

When you’re starting a new business, there are plenty of factors to consider. You’ve got to come up with a business name, lay out a marketing plan and develop a budget that will keep your business afloat. While tedious, these activities can bring on a bit of excitement as you see your business forming. The not-so-exciting things are more administrative in nature, like registering your business, meeting with an accountant, or finding insurance.

Even though they’re not quite as exciting, they are necessary for your business to run without hitches. This article highlights some crucial considerations you should have in mind when you’re looking for business insurance.  

Know the Difference Between Contractor & Employee

It’s important to know what makes an employee and in some cases, people mix up the term, contractor and employee. If you turn to a marketing firm every now and then to handle your marketing duties, that firm and their workers are going to be considered contractors.

Those who come to the office on a regular basis however, even a freelancer who makes up a part of your staff strength, are considered employees.

It’s important to make this distinction early because it’s going to determine the type of insurance you purchase. If you’re a one-man business who contracts or outsources a lot of work, you’ll probably just need general liability. If you’re hiring multiple employees however, you’re going to want to look into workers’ compensation.

Evaluate Your Needs Consistently

There are plenty of things you need to do in order to be successful in business and all of those successes lead to business growth. While you may have started the year off with just a handful of employees, you could double your employee numbers and acquire a company vehicle by the end of the year; this means you’re going to have to expand your insurance coverage.

If you move to another state however, that state could have its own regulations and rules that you have to comply with. 

Check Local Requirements

Not all states are the same and while every state requires you to have business insurance in order to be recognized and legitimate, some require you to get additional insurance for your business.

Disability insurance, for example, is required by five states and Puerto Rico. While wading through all the paperwork and bureaucracy, it may be difficult to find out what exactly you need to do.

Your Home Business Needs Coverage Too

You might think that a home business that’s more of a side gig doesn’t really require insurance, but in some cases, it does. Let’s say you had a small photo studio set up in your garage for portraits or other projects but one day, a flood comes through and wipes everything out. If you had product insurance, you would be covered. Even the smallest of small businesses need some coverage to be able to recover in the event of an adverse event.

Insurance Is Worth the Cost

While this might seem obvious to some, others may look at business insurance and say to themselves, “Great, something else that’s going to cost me money.”

If money is tight and you’re looking to cut corners with your insurance coverage, look to cut corners somewhere else. Over half of businesses within the last decade have had to use their insurance to help them recover from negative incidents like burglary or slander. 

While you may see it as an extra cost, it’s much better than losing thousands of dollars of products through burglary and not having a way to replace it.

Use A Fine-Toothed Comb When Reading Your Policy

It almost goes without saying, but all insurance policies are going to be quite different. Premiums and deductibles are going to vary wildly and what may have worked for one business may look entirely different to what may work for you.

Make sure you go over your policy to understand all the ins and outs. If you’re confused, ask an independent agent to help you sort through the confusing bits.