Insurance

6 Types of Business Insurance Which Protect Small Businesses

How do you know which insurance policies your business needs? Generally, coverage tends to vary depending on the industry. However, there are several types of business insurance policies most businesses require to safely operate. Let’s review basic coverage recommendations.

1. Business Owner’s Policy (BOP)

A business owner’s policy (BOP) is a combination of three policies: general liability, commercial property, and business income.

General liability insurance which protects businesses from bodily injury, property damage, and personal injury claims.
Commercial property insurance to protect the building you own or rent where you run the business.
Business income insurance is also known as business interruption insurance. If your business is not open or needs to shut down for a lengthy period, business income insurance replaces lost income.

This coverage is popular with business owners. It is also customizable. For example, you may additionally include a professional liability insurance policy in your BOP coverage.

2. Workers’ Compensation Insurance

Workers’ compensation is a compensation program administered by the U.S. Department of Labor. It is a legal insurance requirement in most states for businesses with employees.

If an employee suffers a work-related injury or gets sick from their job, they will receive benefits through workers’ compensation.

3. State Unemployment Insurance (SUI)

If an employer plans to hire and pay employees more than $300 in wages, they must file for state unemployment insurance.

SUI is an employer-funded tax. Employers pay unemployment taxes on the wages of their employees which eligible workers then receive as benefits. Employers must submit a tax report to the state each quarter after filing for SUI.

4. Cyber Insurance

This is also known as data breach insurance. A cyber insurance policy helps protect businesses from cyber attacks, data breaches and loss of data, and malware attacks.

This coverage can help small businesses pay costs which allow them to notify individuals, like customers, impacted by the data breach. It also assists in paying for monitoring services for identity theft. Businesses which conduct transactions primarily online will need to invest in cyber insurance to ensure the safety of this information.

5. Key Person Insurance

This is also known as life insurance.

If the owner or a critical employee is unable to work, becomes disabled, or suffers an untimely demise, key person insurance helps financially protect the company and its continuity moving forward. This policy also covers expenses in finding a replacement for the business.

6. Commercial Umbrella Insurance

What if a small business experiences other unforeseen circumstances and does not have coverage through their standard policies?

The best approach is to apply for extra coverage through commercial umbrella insurance. This policy helps extend coverage limits as necessary on various insurance policies.

Do I Need Any Other Insurance?

Here are a few additional insurance policies where your business may require coverage:

Do you have a company car? You may need commercial auto insurance to keep employees and yourself safe on the road.
Small businesses which manufacture and sell products in the general market need product liability insurance. This policy ensures products are safe to use and do not cause harm.
If you have employees, obtaining employment practices liability insurance (EPLI) helps protect businesses and their owners from employment-related claims like wrongful termination or failure to promote.
Health insurance isn’t a form of insurance which protects a small business. However, it’s a great benefit to offer talent you plan to hire.

There are even more types of insurance available for small businesses across all industries. Speak with an insurance agent to learn more about coverage available for your company. Then, choose the right coverage options and enjoy the peace of mind in knowing your small business has the protection it needs.

Protect your small business with SUI insurance. Reach out to MyCorporation at mycorporation.com or give us a call at 877-692-6772.

Deborah Sweeney

Deborah Sweeney is an advocate for protecting personal and business assets for business owners and entrepreneurs. With extensive experience in the field of corporate and intellectual property law, Deborah provides insightful commentary on the benefits of incorporation and trademark registration. Education: Deborah received her Juris Doctor and Master of Business Administration degrees from Pepperdine University, and has served as an adjunct professor at the University of West Los Angeles and San Fernando School of Law in corporate and intellectual property law. Experience: After becoming a partner at LA-based law firm, Michel & Robinson, she became an in-house attorney for MyCorporation, formerly a division in Intuit. She took the company private in 2009 and after 10 years of entrepreneurship sold the company to Deluxe Corporation. Deborah is also well-recognized for her written work online as a contributing writer with some of the top business and entrepreneurial blogging sites including Forbes, Business Insider, SCORE, and Fox Business, among others. Fun facts/Other pursuits: Originally from Southern California, Deborah enjoys spending time with her husband and two sons, Benjamin and Christopher, and practicing Pilates. Deborah believes in the importance of family and credits the entrepreneurial business model for giving her the flexibility to enjoy both a career and motherhood. Deborah, and MyCorporation, have previously been honored by the San Fernando Valley Business Journal’s List of the Valley’s Largest Women-Owned Businesses in 2012. MyCorporation received the Stevie Award for Best Women-Owned Business in 2011.