Summary: Learn why liability insurance, commercial property insurance, and business interruption insurance are three essential coverages for small business owners. Owning a small business can be very rewarding. It can provide you with the gratification, independence, and financial security all entrepreneurs seek when they strike out on their own. Running your own company, however, is not free of challenges and is certainly not without risk. An accident, natural disaster, or other disruptive and expensive incident could severely damage or destroy all you’ve worked so hard to build unless you’re properly protected.
Proper insurance coverage is critical to your success as a small businessperson in our modern and (financially and otherwise) dangerous world.
Every small business has different insurance needs, but there are some essential types of insurance that no small business should be without. They are general liability insurance, commercial property insurance, and business interruption coverage (also called loss of business income insurance).
What Is General Liability Insurance?
General liability insurance is critically important coverage that protects your business against claims of personal or bodily injury and/or property damage resulting from your business operations or taking place on your business’s premises.
If a customer or employee is injured by a slip or fall, a machine or piece of equipment malfunctions and hurts someone, or a business mishap damages someone’s property, you’re covered if you have the right general liability insurance
. Other perils that can be covered include employee damage to a third party’s real or personal property, legal expenses due to alleged reputational harm, damages due to copyright or intellectual property infringements, and more.
General liability is a must. It should be considered the foundational element of any small business insurance plan. This coverage should never be neglected or disregarded.
What Is Commercial Property Insurance?
Commercial property insurance is critical coverage designed mainly to protect the buildings and real estate you own or rent to run your business. But, in addition to real property, most of the physical contents of commercial buildings are covered as well.
There are dozens of ways your property can be damaged. They include theft, malicious vandalism, storms, equipment or structure failure, accidents, spills and overflows, and many more. No matter how the damage happens, it will be expensive to fix, repair or replace.
Without adequate property insurance, the cost of recovery could be devastating to your business and its bottom line. On the other hand, if you have the right insurance with the right company behind it, your small business can recover quickly with the bare minimum of disruption, downtime, and financial loss.
What Is Business Interruption Insurance?
Business interruption insurance is specialized coverage designed to protect business owners from costly losses resulting from unexpected disruptions in business operations. Things like vandalism, weather events, vehicle and equipment breakdowns, illnesses (such as an outbreak of flu), supply chain issues, and other disruptive events can severely hamper or temporarily shut down a business out of the blue. It’s important to prepare for such incidents.
When a covered event happens, and business income is interrupted, a business interruption policy can replace lost revenue. Business owners with this crucial coverage will be able to make payroll, pay the mortgage or rent, and meet utility or other expenses on time and in full. You’ll be able to reopen at full capacity with minimal delays and financial hardships. On the other hand, if you lack business interruption coverage, you’ll be on your own. You may have to forgo the income you would have earned, pay expenses out of your pocket, or close your doors. You won’t have many other choices.
Keep in mind, however, there are limits to the amount of coverage and to the events that are covered. It’s important to work with a company you can trust and read your contract carefully.
A Business Owners Policy From AmTrust Financial
In the final analysis, all three of these insurance types — general liability, commercial property, and business interruption — are vital to a small business owner. There’s no way to adequately prioritize one coverage over another. The smart thing to do is secure them all in the most cost-effective manner possible.
To that end, AmTrust Financial has combined these three all-important coverages into a single package we call our
Businessowners Policy. This comprehensive product provides small business owners with the basic required coverages in a single bundle, which results in a significantly lower premium.
An AmTrust Financial Businessowners Policy can be customized for businesses of almost any size. But we’ve found it to be the perfect solution for small businesses with less than 50 employees. And rest assured, you can add other coverages as needed.
Cyber insurance is becoming more popular every day, and employee benefits coverage is always a good idea.
Whatever your small business insurance needs, our
knowledgeable, experienced agents are always available to help you design a plan that provides you with the coverage you need at a price you can afford.