Do I Need Business Insurance - ALLCHOICE Insurance - North Carolina

Do I Need Business Insurance?

Estimated reading time: 5 minutes

Return To: Business Insurance – The Ultimate Guide

If you’ve recently started your small business, the last thing that you want is to have accidents or customer complaints. In many cases, you need to shell out money to help cover the damages incurred because of these events. 

Entrepreneurs understand that spending a large amount of money during the early parts of building a business can financially hurt the company. To avoid this, there are business insurance policies that can help soften the impact of these expenses. Read on to learn more about this and have a definite answer to the question, “Do I need business insurance?”

What Kind of Insurance Do I Need for My Business?

You will need different types of insurance policies for both small-scale and large-scale businesses. You need to get these in anticipation of sudden and unwanted events. In this section, you will learn about some areas of your business that you need to cover with different insurance policies.

  • Business Owner: As a business owner, you need to make sure that your health, your properties, and everything concerning your business will be adequately covered. Some insurance companies provide business owner bundles at lower costs to help cover for these things.
  • Commercial Property Insurance: You need to ensure that damages incurred to your business properties will be adequately covered in case of accidents and natural calamities.
  • Employees: You need to consider your employees’ health and salaries in case of possible business closure or temporary cessation of operations. You have to think about them in case something untoward like an accident happens. 
  • Vehicle: Regardless of the types of vehicles, you need to look for policies that can cover their costs in case of damage due to accidents or natural disasters.
  • Products and Services: There’s always the possibility of your products and services not working as intended. Sometimes it’s no one’s fault and just a result of unexpected circumstances. You need to look for at least one insurance policy that can cover the cost of damages because of situations like this.
  • Logistics: In some cases, you need to think about instances that require you to stop operations of your physical store for a while. Some recent examples are the COVID-19 lockdown policies. You want to be financially prepared for the loss that will incur because of this.
  • Tax and Audits: You want to prepare your company in case your company is picked for a random audit and investigation. While it may not have legal complications for your business, the entire process will still cost you some money.

What Insurance Do I Need for My Business?

There are different insurance policies that can cover all the areas mentioned above. These small business insurance requirements are specifically designed to anticipate unwanted events and serve as financial protection against them.

  • General Liability Insurance: This provides protection to you and your products, services, and employees. If a customer complains of bodily or property damages because of one of these three things, this insurance policy can provide financial protection. 
  • Professional Liability Insurance: This is similar to general liability. The main difference is the employee involved is a professional. Some of the professionals include lawyers, doctors, and accountants. 
  • Employees: Also known as worker’s compensation insurance, this usually goes hand in hand with employment practices liability (EPLI) policies.
  • Management Liability: This policy is applicable if a supervisor, manager, and other non-rank-and-file employees get involved in a situation that causes potential damage to the company.
  • Commercial Property: This is a must to obtain because it covers most of the tools and equipment that you need to use for regular operations. It helps protect your company against issues such as smoke damage, fire, theft, vandalism, and damage due to natural phenomena.
  • Commercial Auto Insurance: This insurance policy mostly covers the vehicles that your company uses for official and authorized transactions. Some of the vehicles that you can get a policy for include cars and trucks. For vehicles that employees use for business transactions but are not company-owned, you may declare them under the business owner insurance policy.
  • Business Owner: This type of insurance policy mostly covers what you need to get your business started. However, the total cost that it can cover is much smaller compared to the specific policies stated so far. If you want to have additional peace of mind, you may consider getting a commercial umbrella liability policy as well.
  • Business Interruption: This policy can cover you in case you need to stop operations for a given amount of time. Depending on the insurance company, some approve coverage for non-operation within an indefinite period.
  • Tax Audit: This policy can help cover expenses when your business has to undergo an audit and investigation. For the record, this doesn’t necessarily mean that your business has violations. If you need to hire professionals such as lawyers and accountants, this policy can help you cover these expenses as well.
  • Data Breach: This is sometimes known as a cyber liability insurance policy. It covers the damages due to file loss. It doesn’t matter if the involved files are electronic or if they are purely on paper. Both of these are covered in case of accidents that cause corruption to the files. 

What Kind of Business Insurance Do I Need?

The insurance policies that you should get will heavily depend on the nature of your business. Here’s a table to make it easier for you to decide:

Type of InsuranceWhat It CoversEstimated Annual Cost
General LiabilityDamages due to products, services, or employees$780
Professional LiabilityDamages due to professional services$1,164
Management LiabilityManagers, supervisors, and other employees who manage the business$1,240
Commercial PropertyOffice equipment, tools, and other things within the business premises$755
Commercial VehicleCompany-owned vehicles$1,704
Business OwnerNon-owner company vehicles, liabilities, business interruption, and other related matters connected to the business and its owner$1,188
EmployeesMedical benefits and wage replacement for employees$1,332
Data BreachElectronic and paper data loss$1,675
Business InterruptionIncome loss during catastrophic events$1,500
Tax AuditExpenses due to audits and relevant professional fees$1,656
Types Of Business Insurance And Approximate Annual Cost

Let Us Know What You Think

It’s important to get business insurance, especially during these unpredictable times. 

We will help you by providing bundles that can get you started. In case you consider expanding your company after a few months or years, you may add more policies or upgrade the bundles as you see fit.

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