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5 Frequently Asked Questions About Small Business Insurance

Starting a small business is equal parts exciting and overwhelming. While some business areas you can’t wait to get started on, like branding or product development, other aspects of business don’t quite hold your attention. Insurance may be one of them, and we wouldn’t be surprised (or offended) if it neared the bottom of your list things to do. Insurance is as integral to your business’s success as a product that sells, and taking the time to insure your business correctly may save hundreds of thousands down the line.

We know it may be difficult for those unfamiliar with the industry to understand what insurance you need (or what it even is), so we’ve collected the top five questions we receive to help you jump-start insuring your business.

What is small business insurance?

Small business insurance is an umbrella term used to describe common insurance policies designed to protect business owners from risks they may encounter, such as bodily injury, property damage, negligence, or a cyber attack. The most common types of business insurance are:

  • Commercial General Liability Insurance covers costs associated with claims or lawsuits alleging third-party bodily injury or property damage resulting from your business operations.
  • Professional Liability Insurance covers claims or lawsuits alleging negligence, misconduct, or failure to deliver a service as promised.
  • Product Liability Insurance covers claims or suits for a third-party injury or property damage resulting from a product you sell or manufacture.
  • Cyber Liability Insurance protects cybercrimes that may result in compromised data.

Does my small business need insurance?

Small business insurance is not mandatory for you to operate your business; however, it can protect you from many of the common risks you may encounter in your business operations. As an integral part of your risk management strategy, small business insurance covers costs associated with claims or lawsuits that may otherwise threaten your business’s survival.

What does a small business insurance cover? 

In general, liability insurance provides coverage against lawsuits or claims filed by a third-party for bodily injury, property damage, or negligence. Your specific coverage will vary based on your profession, industry, and operations.

How much does small business insurance cost?

Several factors, including industry, location, experience, and claims history, are used to determine your small business insurance policy’s cost. You can anticipate spending $650 on an annual commercial general liability insurance policy with a $2M limit for a small- to medium-sized business.

For home-based businesses providing virtual services, do I still need insurance?

While some home insurance policies cover personal items used for work, a business insurance policy will insure where a home policy won’t. For example, if a client injures themselves in your home office or is unhappy with the service you provide, your small business insurance policy will cover any associated costs.

At Zensurance, our mission is to make small business insurance as accessible as possible, and we do so simplifying the buying process and eliminating industry jargon. With our self-serve online platform, we’ve helped over 50,000 small business owners insure their businesses in a matter of minutes with the coverage they can understand. Running a business is stressful, but your insurance doesn’t have to be.

For small businesses in BC, please visit www.zensurance.com/british-columbia-business-liability-insurance for more information.