Small Business Insurance

Small businesses, despite their size, face numerous possible risks. The precise risks that any one small business is exposed to depends on its location, whether it has employees, what products or services it offers, and many other factors. For example, a cafe will face different risks than a construction service and the two businesses, therefore, need different coverages. No matter what risks a small business faces, though, small business insurance can likely provide important protections.

In order to meet small businesses’ diverse insurance needs, insurers offer a number of different small business insurance policies. Some policies that most small businesses can benefit from include small business liability insurance, commercial property insurance, commercial auto insurance, cyber crime insurance, and business interruption insurance. A few specialized policies that small businesses might want include pollution coverage, contractors and builders risk coverage, and liquor liability coverage.

Small business liability insurance generally provides protection against covered liability lawsuits for covered incidents. Exactly what incidents a policy covers can vary, but most small business liability insurance policies cover slander and libel claims, and injuries that people sustain while on a business’ property. These kinds of incidents can happen to any business, regardless of what industry it’s in, which is why many small businesses get this coverage. If a business is charged in a covered lawsuit, small business liability insurance will typically cover both legal fees and settlements associated with the suit (up to the insurance policy’s limit). Moreover, coverage usually is effective as soon as a covered liability suit is filed against a business. Businesses don’t normally have to wait until they’re found responsible in court to begin getting benefits.

Business owners policies (BOPs) and commercial package policies (CPPs) are two forms of package insurance policies that may be appropriate for small businesses. As package policies, BOPs and CPPs bundle together several individual small business insurance policies. The policies in BOPs tend to be more basic, while CPPs frequently provide more advanced and specific coverages. Depending on a small business’ risk exposure, either may be appropriate.