5 Types of Insurance Your Small Business May Need
If you own your own small business, you know how much work it is to keep it running. You may have even started your small business from the ground up, and you have the final say on everything from what kind of coffee to buy for the staff room to making decisions on whether you’re ready for expansion.
With all of this on your plate, you may feel overwhelmed at times and wonder if you’ve genuinely got everything under control. One way to help give yourself peace of mind is to make sure that you have the right type of small business insurance. Appropriate small business insurance can make sure that you are covered in various situations, and that you’re not left alone to deal with things if something goes wrong.
These are the most common types of small business insurance that your company may need:
- Property coverage
- Business interruption coverage
- General liability coverage
- Professional liability coverage
- Employment practices liability coverage
At Oegema, Nicholson & Associates, we’re happy to provide you with more information about these different types of small business insurance.
Property Coverage
Property coverage for a small business is similar to house insurance, but there are some differences. For example, house insurance covers both your house itself and the contents (clothes, furniture, books, etc.). In contrast, small business property coverage insurance generally only covers the damage to the property itself. You must purchase separate contents coverage to have insurance for things like computers or equipment.
If, however, any property or buildings owned by your business are damaged by a covered peril (for example, a fire), then small business property insurance will cover it. Whether it’s damage due to your roof collapsing from snow or someone trying to break in, as long as it’s a covered peril, then your property coverage will take care of the cost of repairs.
Business Interruption Coverage
If your business is damaged by something like a fire, a bad storm, or another covered peril, then the actual damage to your office or property is covered by property insurance. However, what about the money you’re losing out on while you can’t operate your small business?
In this situation, business interruption coverage can help cover your losses. Business interruption coverage is also sometimes referred to as business income coverage, and it can be used to help cover any of the following due to a damaged business:
- Lost income
- Employee wages
- Costs required to rent a temporary workspace
One of the most critical times that business interruption insurance can come into play is when a natural disaster strikes your entire town or city. In 2016, wildfires destroyed Fort McMurray in Alberta, and in 2019, they were still working on rebuilding. In this kind of situation, business interruption coverage would have been critical to helping small businesses do everything from cover their bills to make sure they could pay their employees even if their business was severely damaged.
General Liability Coverage
General liability insurance is one of the most critical types of small business insurance coverage you can have. General liability can protect you in case of a lawsuit for a variety of issues, such as:
- Someone is injured on the premises of your business.
- Your product injures a customer.
- Your product or your employees damage someone’s property.
Between legal expenses and the actual damages sought by a lawsuit, the costs can add up. This is why general liability is such an essential type of insurance to have because one lawsuit could destroy your business if you don’t have sufficient coverage.
Professional Liability Coverage
Professional liability insurance is not the same as the general liability coverage we’ve just mentioned. The purpose of general liability coverage is to protect your business in case of an accident or negligence: for example, if someone slips and falls on ice in front of your business. However, the purpose of professional liability insurance is to cover your business in case of damage caused by advice or services provided by your company.
Any small business that gives professional advice or services must have professional liability coverage. Some examples of these types of businesses would be an engineering firm, an accounting business, a small law firm, or any kind of business where a client could hold you responsible for a loss they feel is tied to your advice or service.
Employment Practices Liability Coverage
Lawsuits can be devastating to a small business, and they can even come from current or former employees. If an employee feels they have been wrongfully terminated, discriminated against, or harassed at work, they could file a lawsuit against your business.
Employment practices liability insurance will help keep you protected against that kind of threat. It will provide reimbursement for expenses you may face if someone files this type of lawsuit against you.
How can Oegema, Nicholson & Associates help me with small business insurance?
It can seem overwhelming trying to figure out what type of small business insurance you need and how much coverage you should have for every kind of insurance. That’s where experts like Oegema, Nicholson & Associates can step in and help you!
We’ll take the time to learn what your business does and then recommend the essential types of small business insurance for you. We’ll work with you to customize a policy that fits both your needs and your budget, while ensuring that you’re adequately protected, no matter what happens to your business.
You’re Ready to Take the Next Step
You’ve now learned about the most common types of small business insurance that your company may need, including:
- Property coverage
- Business interruption coverage
- General liability coverage
- Professional liability coverage
- Employment practices liability coverage
We’d be happy to help you learn more about these different types of small business insurance in Ottawa. Call us at 613-519-2030 or contact us online.
