As a small business owner, you know that you’ve got a lot of expenses to worry about, from renting a space for your bakery to purchasing raw materials for your crafts. Depending on the type of business you own (like a cupcake shop compared to a fine crafts store), you may have more costs some months than others. It can definitely be difficult to budget.
However, one cost that is essential is business insurance. Despite misconceptions, this form of insurance is very useful and can be well worth the expense. Besides, if you shop around, you could still find a good rate.
Let’s take a look at some of the basics of business insurance.
Who Needs It?
Like many small business owners, you may feel that you don’t really need this kind of insurance. After all, will you really encounter a situation in which it would be useful? The truth is, yes, you probably will. At some point during your company’s lifespan, you may have to deal with a natural disaster, a break-in, theft or even someone suing you. Business insurance can cover all of these incidents.
What if I Have Other Insurance?
You might be wondering if you need business insurance if you have renters’ insurance. While renters’ insurance can cover some physical property, such as an expensive camera or laptop that you use for your business, it doesn’t cover everything. In fact, many renters’ insurance limit what can be covered under “business pursuits”, which means the entirety of your small business may not be covered.
What if Something Really Bad Happens?
If, say, your work laptop gets stolen, some business insurance policies will reimburse you for the total amount you paid for that computer. This is a recent change in insurance. Usually, you would get what it was worth at the time it got stolen from you. However, be aware that not all policies offer this perk, and that policies that do offer it are generally more expensive.
What Does “Liability” Mean?
This can be confusing for people to understand, because the insurance definition of “liability” differs a little from the layperson’s definition. In insurance terms, liability essentially means that if you are negligent and someone gets hurt because of it, that person can sue you.
This is different from “errors and omissions.” This term means that there was a professional mistake, or error. For example, if you are a photographer taking photos for a big charity event, and your hard drive fails or you miss an important shot of the CEO, that would fall under this category. If your business insurance policy includes professional liability, which does not usually occur, that is what would cover you if an error or omission happened.
Get Covered Today
Remember, not every business insurance policy is the same. One may be better for you than another, and you also have to factor in comparing costs and benefits. At ABCO Insurance Agency, Inc., we offer you the chance to compare rates from 25 different insurance companies. That way, you can find which would be best for you. Contact us today to get started.