Small businesses are at the heart of our local communities and they make up about 98% of all businesses in BC. If you run a small business, it’s essential to protect your investment in case of the unexpected.
What are the different types of small business insurance?
Small business insurance is an umbrella term for insurance policies that protect small business owners from common risks like theft, fire, damages and lawsuits.
Here are three common types of small business coverages and how they can provide you a safety net.
Property Insurance
Do you run your business out of a commercial space, like a garage, warehouse or office? Do you have tools, equipment or inventory that would be expensive to replace? If your answer is yes, you’ll want to cover your workspace and all its contents. Whether you rent or own the workspace, your business can be held responsible for damages that may happen. If you operate a home-based business, small business insurance can still protect you by filling in the gaps that typical home insurance policies do not cover. This can help you in situations such as business equipment or inventory getting damaged.
Property insurance can also cover tools and equipment that are essential to your business’s operation. Tools that you carry or store at job sites may be vulnerable to theft and are costly to replace. Property insurance coverage means you’re covered to replace or repair your equipment wherever it’s kept.
Property insurance can protect you in unexpected situations like a flood, fire or earthquake that damage your inventory or equipment. Disasters like these bring many challenges. Property insurance helps you focus on getting back to business without paying for unexpected repairs or replacements.
Specialized Coverages
There is also a range of optional coverages that can protect specific aspects of your business. For example, losing your customers’ sensitive data in a cybercrime breach can cause loss of business and compliance penalties. To protect your business during a data breach, get cyber expense coverage.
Things don’t always go as planned, and the breakdown of an essential piece of equipment or technology can impact your operations. Optional equipment breakdown coverage can help keep you moving forward while you fix your broken-down equipment. You can also add optional business interruption insurance to protect against unexpected income loss as well.
Liability Insurance
When you start selling goods or services, you expose yourself to various liability risks. Let’s say a customer gets sick from your product. Are you adequately covered if they make a claim against you? Liability coverage helps keep your business running smoothly if you’re forced to deal with disputes.
There are two main types of liability insurance:
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- Commercial general liability insurance protects your business against claims of bodily injury or property damage to third parties. For example, if a customer slips, falls and hurts themselves at your workplace.
- Professional liability insurance provides coverage if a mistake made by you or an employee causes a customer financial loss. This is a more specialized type of coverage. To find out if this applies to your business, read more below.
Professional Liability Insurance
Professional liability insurance is designed for businesses that offer professional, creative, digital or consultation services. These are essentially professions where you share your professional advice, expertise and opinions, like:
- Accountants
- Financial planners
- Creative directors
- Graphic designers
- Management consultants
- Mortgage brokers
- Real estate agents
- Web developers
If you ever get accused of negligence, providing poor advice or failing to provide a service as promised, professional liability insurance can protect you from the financial hardship of lawsuits against your business. It’s designed to cover you from making an error or failing to provide a service that causes a financial loss to another.
Let’s say you’re a web designer who misses a zero in a client’s ad for a product promotion. This could result in the client having to honour the sale and they could sue you for the difference in price. This is where professional liability insurance can help.
Professional liability insurance for small businesses can help cover fees from legal defense costs, judgment, settlements fines and penalties resulting from allegations of breach of professional services, misrepresentation, wrongful business practices, misleading advice and conflict of interest.
Protect Your Business as it Grows
A small business insurance policy is an important part of your long-term business success. BCAA Small Business Insurance offers customized small business insurance coverage with online convenience and you can save up to 10% on a new policy if you’re a BCAA Member. Plus, use promo code SAVE50 for $50 off a new policy.
Get a free quote today at bcaa.com/smallbusiness
Want to learn more about small business insurance? Here’s: