Small business insurance is key to preserving your business assets, protecting your personal property and providing legal representation if a lawsuit is filed against you. A home business owner is not shielded from lawsuits, and when you don't have insurance, you may end up paying large sums of money in settlements or awards to plaintiffs. Your bank account, home and future wages may be taken from you. The risk posed to your business is too high if you don't have one ore more of these small business insurance options:
1. Business Auto Insurance
You may decide to purchase a vehicle for business use. For example, you may run a courier business from home, but hire an employee to make deliveries using your business vehicle. You'll need to buy business insurance, because your personal insurance will not cover business activities. Small business insurance for automobiles is similar to personal insurance, in that coverage can include:
- Medical payments
- Emergency roadside assistance
- Lost wages
- Personal injury coverage
Your personal auto insurance company should offer business auto insurance. Check with them first, to get a multi-policy discount.
2. Home Business Insurance
It is possible to add a rider to your existing homeowners policy that will cover your home business. You should read coverage information carefully, because you don't want it to be so limited that it doesn't provide you with adequate coverage. You can purchase home business insurance that's designed specifically for the home business owner. Select small business insurance that offers liability protection, as well protection against the loss of business records and financial data. Another important feature to look for is loss of wages. If a catastrophe occurs and you're unable to earn business income, your small business insurance will pay you what you normally earn.
3. Malpractice Insurance
If your profession requires you to obtain and maintain a license to practice, don't run your business without malpractice insurance. It's the simplest way for someone to put you out of business. As the name implies, it provides coverage in the event that someone files a claim against you for giving poor advice, or failing to give vital advice that results in financial, personal or other injury. You'll need legal representation in malpractice claims, and you'll get it if you buy this form of small business insurance. Not having malpractice insurance is not optional, because you don't want to lose your license to practice after working so hard to earn it.
4. Health Insurance
Healthcare reform mandates that individuals buy health insurance, effective 2014. You may also be considering the purchase of health insurance for your employees. There are two ways to purchase health insurance:
- Buy health insurance from an insurance company
- Buy shares in a non-profit healthcare sharing program
Either of these are allowed under the healthcare reform, and which you choose depends on your budget, your overall philosophy on healthcare, and the best option to best meet the needs of your family and employees.
Small business insurance is costly when compared to other business expenses, but you shouldn't run any business without the coverage you need to protect yourself.
Daphne Mallory, Esq. is the co-owner of Mallory Writing Services and has written more than 100 articles helping home based business owners and entrepreneurs start and market their business. You can learn more about her here.