Running your own business takes an incredible amount of dedication and determination. From the planning stages through to your strategic launch and beyond, you’re investing sweat equity and financial resources to make your dreams a reality.
But are you taking the right steps to protect yourself and the future success of your business?
By speaking with entrepreneurs and insurance experts, we’ve uncovered eight things that every small business owner needs to know about insurance. Whether you’re an artist, consultant, restaurant or retail shop owner, pet sitter, designer, contractor, hairstylist or in any other line of work, this knowledge will help you roll with the punches and survive in unpredictable situations.
Many small business owners don’t realize they need insurance. Others are tempted to operate without it to save some money. Now that you know you need insurance, think of what you stand to lose. Could your business survive financially through an accident, complete inventory loss, stolen equipment, client lawsuit or other serious, unexpected events? With the right insurance in place, you are protecting your livelihood and all the work that you’ve put into your business venture.
Insurance is complex and there are many factors that go into determining the type of coverage you need and how much it will cost. This may include the industry you work in, whether your business is run from home or another location, number of employees and value of your equipment. There are also ranges within the various types of coverage. A home-based business owner, for example, may not need as much coverage as someone who operates out of three locations.
If your house insurance provides any coverage, the limits will be much lower than they would be with a small business policy. “If you have a laptop, your personal insurance may not cover it or any other equipment that you use for your business,” explains Ilda Dinis, Vice President of Customer Experience and Marketing for TruShield Insurance. “If you run a business from your house or condo and a customer falls down the stairs, you would need a business policy to cover that liability.” Business insurance can also protect you from loss of income due to a covered event.
Thinking that you will never have to review your insurance is a common misconception. Each year, when your policy is up for renewal, reassess and discuss the coverage with your insurance provider. You also don’t want to be left with a policy that doesn’t cover your growing business. If something major changes, contact your insurance company to see if anything needs to be updated before your next renewal. These changes could include adding new locations, equipment, employees or vehicles.
Businesses with one or more employees can get group health, life, disability and critical illness insurance for their workers. Just ask Taylor, the owner and principal of a small production accounting firm. After tripping at a client’s office during a construction project, she broke her hand and suffered other injuries that made it difficult to work. Her supplementary health insurance helped pay for the physiotherapy she needed to heal and get back to a full-time schedule sooner than she had expected.
If you are using vehicles in your business and employ drivers, you’ll need a commercial policy. It will protect your business if an employee gets into an accident in a company vehicle. Commercial car insurance can also protect your business from lawsuits and property damage or cover the costs of temporarily replacing a vehicle so there is no interruption to your operations.
Small businesses can be a big target for cyber criminals. You may not think of your business as a potential victim, but it could be at risk if you run any operations online, collect and store customer data or process credit and debit card transactions. Having cyber insurance and putting preventative measures in place can help protect you from Internet threats.
Without the right insurance coverage, even the most successful entrepreneurs can find themselves quickly out of business.
Note: Members of The Chef Alliance are covered by Liability Insurance, which is included in their membership benefits. For more information, please contact our Success Managers.