What kind of insurance coverage do I need for my small business?

Insurance Coverage for Small Business Owners

As a lawyer, I recommend that small business owners purchase several types of insurance coverage to protect against potential liabilities and losses. The specific types of coverage a business needs may depend on the size and nature of the business, as well as state and federal laws that apply.

General Liability Insurance

General liability insurance is a common policy that protects a business from liability claims for bodily injury or property damage caused by the business, its employees, or its products. This coverage also extends to completed operations and advertising injury. It can also cover legal fees and settlements or judgments in the event of a lawsuit.

Professional Liability Insurance

Professional liability insurance, also known as errors and omissions insurance, is another important coverage for businesses that offer professional services or advice. This policy can help protect a business from claims of negligence or failure to perform professional services, as well as covering legal fees and damages.

Workers' Compensation Insurance

Workers' compensation insurance is a requirement in most states and provides coverage for employee injuries or illnesses that occur on the job. This coverage can also help protect a business from legal claims related to work-related injuries or illnesses.

Business Interruption Insurance

Business interruption insurance can provide coverage in the event that a business is forced to temporarily shut down due to a covered event, such as a natural disaster. This coverage can help a business cover expenses during the shut-down period and may also cover lost profits.

Property Insurance

Property insurance can protect a business against damage or loss to its physical assets, such as buildings, equipment, inventory, and furniture. This coverage typically includes protection against fire, theft, water damage, and other common risks.

Cyber Liability Insurance

Cyber liability insurance is becoming increasingly important for businesses that collect and store sensitive customer data. This coverage can help protect a business from losses due to cyber attacks, data breaches, or other cyber-related risks.

It is important to note that these policies may have limitations and exclusions, and that coverage needs may vary based on individual circumstances. Business owners should discuss their insurance needs with a licensed insurance agent or broker and review policies carefully to ensure they are adequately protected.