Determining The Type Of Business Insurance You Need
February 25, 2011
Guest post by Debbie Allen of The Things Women Want
If you are a small business owner you may be wondering what type of business insurance you need (unless you have it already – that calls for a 5 minute internet break). Two of the big questions are where to purchase it and how much it will cost, however, the first part of the equation is deciding what insurance you actually need.
While insurance can be a complicated topic it can be simplified if you do your research. The basics include assessing your business and giving consideration to the various types of unforeseen events and or catastrophes that could result in a loss of income or even the end of your business (let’s avoid that).
Working with an agent or broker that is experienced in small business insurance is recommended. These agents know how to determine the right coverage for different types of businesses. Your agent should be willing to review and analyze your business functions to create an insurance package that will meet your specific needs.
There are several different types of insurance that should or can be considered and they may not be for you. The most important is Health insurance, which provides coverage for costs related to an unexpected or major illness (no need for this in Canada). This insurance is for employees as well as owners. Other types of coverage that provide protection for more specific losses and expenses can also be purchased. If you’re just working by yourself, you’ll want to check out Freelancers Union insurance, as they offer benefits and health insurance not just for you, but for your family as well.
If you decided to hire a few employees, you will need to have workers’ compensation insurance. Businesses that use vehicles as part of the business functions will need to have commercial automobile insurance.
Two other common insurance for small business, not necessarily for service based freelancers are property and liability insurance.
Property insurance provides protection for business property and or equipment. Business income insurance is a type of coverage that protects your income in the event of a covered loss. This type of insurance is especially suggested for brick and mortar businesses. If a disaster such as a fire occurs it could take months or even years to build up a new clientele base.
Liability insurance is recommended in many cases. This type of insurance can provide coverage if someone gets hurt using your product. Professional liability insurance protects those in professional careers from losses or expenses related to claims filed against them. This type of insurance is needed by doctors, veterinarians, dentists, lawyers, etc.
With so many options it is easy to see why the advice of a qualified agent or broker is helpful. Keep in mind that the insurance business is a ‘business in the business of making money’ like all other businesses. Be aware that some agents will be happy to sell you every product available. Doing your research is imperative if you are going to get quality insurance that meets your needs and budget.
Shop around before making a purchase. Buying insurance from an established and reputable insurance company is the best way to ensure that you will get what you require and stay within your budget. Another way to save money is to purchase a pre-designed insurance package that is created for your specific type of business.
The more you know about insurance and how to protect yourself when buying it the more likely it is that you will get an insurance package that is right for you. Ideally you will buy as much coverage as possible for the things you need to protect without spending more than you can afford.
about the author
This is a guest post for the FreshBooks blog. FreshBooks is the #1 accounting software in the cloud designed to make billing painless for small businesses and their teams. Today, over 10 million small businesses use FreshBooks to effortlessly send professional looking invoices, organize expenses and track their billable time.