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How to Get Insurance for Your Small Business: Smart Tips for Better Coverage

Small businesses need insurance coverage to protect them against risk and financial loss. Small business owners need to do their research to determine the types of insurance they need and to find the best policies for their business model. Small business insurance is crucial for protecting your business and personal assets in the event of an unexpected catastrophe.

Learn how to get insurance for small business and find the coverage you need with these topics:

How to Get Insurance for Small Business

What Insurance Do I Need for a Small Business?

How Do I Get Health Insurance for My Small Business?

How to Get Insurance for Small Business

Small business owners need to obtain insurance to protect their company from the hazards faced in the course of running a business. Getting business insurance is a straightforward process, but you need to do your research ahead of time to better understand your coverage needs. Here are six steps to get small business insurance:

1. Do Your Research

Before speaking to a professional, conduct your own independent research to get a sense of the options available and what your business might need. Get to know the different insurance coverage options available for small businesses. Write down any questions you have and save them for your broker.

2. Assess Your Risk

Consider all the different risks that could harm your business, from lawsuits to car accidents to natural disasters. Write them all down so you can find coverage options that protect against those particular risks.

3. Gather Documentation

Gather all the documentation and business information you need to apply for insurance. The information you’ll need to supply to a broker includes:

  • Your business location
  • The number of employees at your business
  • Your gross sales for the previous year
  • Your total payroll
  • A list of business assets

In addition to the documentation listed, you should also be prepared to answer questions about the age of your office building, the equipment and tools you use for your business and details about your office furniture.

4. Find a Small Business Insurance Broker

Look into insurance brokers in your area who specialize in small businesses. You can do some research online to find local brokers, or reach out to other small business owners and ask for recommendations. When you’ve found a broker you’re comfortable with, set up a time for an in-person meeting.

5. Discuss Your Business Needs

Go over the details of your business with the insurance broker. The broker will know all the questions to ask to determine the coverage you need. You’ll just need to be prepared with the proper documentation so you can answer all their questions. If you have your own questions about insurance policies, make sure to ask them during the meeting.

6. Evaluate Your Coverage Options

Based on your discussion, the insurance broker will provide you with coverage options to protect your small business. Review the options provided. Based on your independent research and the advice of professionals, choose the coverage options that best protect you from the risks specific to your small business.

What Insurance Do I Need for a Small Business?

The insurance coverage requirements for your small business will vary based on your industry, your business model and the size of your company. Here are nine common small business insurance coverage options:

1. General Liability Insurance

General liability insurance protects your small business against financial loss caused by bodily injury, medical expenses, property damage, libel, lawsuits and judgements. This is standard coverage required for most businesses.

2. Business Income Insurance

Business income insurance helps companies collect lost income due to damage or loss that results in your business not being able to operate for a period of time.

3. Commercial Property Insurance

Commercial property insurance protects you from damage or loss of business property due to a range of events, including fire, storms, civil disobedience or vandalism.

4. Business Owner’s Policy

A business owner’s policy (BOP) simplifies your insurance coverage and can make it more affordable by bundling together three common coverage options for small businesses: general liability, commercial property and business income insurance. You’ll only have to manage one insurance policy for those three coverage options and make one payment.

5. Commercial Auto Insurance

Commercial auto insurance applies to business vehicles and their drivers and helps cover the cost of repairs and liability if a work vehicle is involved in an accident.

6. Workers Compensation

Workers compensation provides insurance coverage to employees who become ill or injured in their line of work. It can also provide benefits to an employee’s family or other dependents in the event that an employee dies from a workplace injury or illness. Workers compensation is required by law in most states.

7. Home-Based Business Insurance

Home-based business insurance can be added to a homeowner’s policy if you run your small business from a home office. It provides coverage for your office equipment and supplies and can also provide liability coverage if you have clients or customers who visit your home office for meetings.

8. Professional Liability Insurance

Professional liability insurance covers your business against financial loss in cases where customers are harmed due to mistakes, negligence or malpractice.

9. Data Breach Coverage

Data breach coverage helps cover your business in the event that your business data is compromised for costs such as legal fees, public relations and identity protection solutions.

How Do I Get Health Insurance for My Small Business?

There are five primary ways for small businesses to get health insurance to cover their employees:

1. Contact Health Insurance Companies

You can reach out to health insurance companies directly if you’ve already done some research into the coverage you need and the different providers that offer it. Visit the company’s website to get details about their health insurance plans, request a quote and apply for coverage online. You may be able to get better insurance rates if you deal with the insurance company directly, but many of them require you to go through a broker.

2. Hire an Insurance Broker

Working with a licensed insurance broker can save you a lot of time and money, since they’ll be able to handle paperwork for you, find the best plan to suit your needs and ensure your business is complying with all relevant laws. Try to find a broker who specializes in health insurance for small businesses.

3. Join a Purchasing Alliance

A purchasing alliance is a small health insurance marketplace that allows small businesses to band together and purchase health care coverage as a group. Pooling together in this way lowers the cost of policies and gives you more choices.

4. Join a Professional Employer Organization

A PEO is similar to a purchasing alliance; both allow businesses to join together to lower the cost of insurance coverage. But PEOs also help handle other small business administrative tasks, including payroll, tax filings and employee recruitment.

5. Use SHOP

As part of the Affordable Care Act (ACA), the federal government requires all states to manage a health insurance exchange, which is an online marketplace where businesses can access health care coverage from a variety of insurance providers. Health insurance exchanges at the state level are also available for individuals and families and offer affordable rates.

This article provides more information about health insurance options for small businesses.


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