Small business insurance is one of the most important investments that you can make as an entrepreneur. It can protect your company and its assets from various risks, such as property damage, injuries, lawsuits, theft, natural disasters, and more. Without small business insurance, you could face huge financial losses, legal liabilities, and even bankruptcy.
According to a survey by Insureon, 35% of small businesses have experienced an event that could have been covered by insurance in the past year. However, only 59% of small businesses have some form of insurance, and 21% have no insurance at all. This means that many small businesses are exposed to unnecessary and avoidable risks.
Small Business Insurance
There are many types of small business insurance that you can choose from, depending on your industry, location, number of employees, revenue, and other factors. Some of the most common types are:
General liability insurance:
This covers claims of bodily injury, property damage, personal injury, and advertising injury that you or your employees cause to third parties.
Commercial property insurance:
This covers your business property, such as buildings, equipment, inventory, furniture, etc., from damage or loss caused by fire, theft, vandalism, etc.
Workers’ compensation insurance:
This covers medical expenses and lost wages for your employees who get injured or ill on the job. It also protects you from lawsuits filed by injured workers.
Professional liability insurance:
This covers claims of negligence, errors, omissions, or malpractice that you or your employees make while providing professional services to your clients.
Business interruption insurance:
This covers your lost income and operating expenses if your business is forced to close temporarily due to a covered event, such as a fire, flood, or pandemic.
See Also: Guide to Business Insurance for LLC
These are just some examples of the types of small business insurance that you may need. There are many other types that you can consider, such as cyber liability insurance, commercial auto insurance, product liability insurance, etc.
The cost and coverage of small business insurance vary depending on many factors. Therefore, it is important to compare different providers and policies before you buy one. You can use online tools, reviews, ratings, etc., to find the best small business insurance for your needs. You can also save money on small business insurance by bundling policies, increasing deductibles, reducing risks, etc.
Best Small Business Insurance for Contractors
If you are a contractor or a freelancer who works on different projects for different clients, you need small business insurance to protect yourself and your work. Contractors face many risks that can result in costly claims or lawsuits, such as:
Property damage:
You could accidentally damage your client’s property or equipment while working on their site.
Bodily injury:
You could injure yourself or someone else while performing your work.
Professional liability:
You could make a mistake or fail to deliver your work as promised to your client.
Subcontractor liability:
You could be held responsible for the actions or inactions of your subcontractors or employees.
To avoid these risks, you should consider getting the following types of small business insurance for contractors:
General liability insurance:
This covers the claims of property damage and bodily injury that you cause to third parties while working on a project.
Professional liability insurance:
This covers the claims of negligence, errors, omissions, or malpractice that you make while providing professional services to your clients.
Builder’s risk insurance:
This covers your materials and equipment from damage or loss while they are being used or stored at a construction site.
Errors and omissions insurance:
This covers the claims of financial losses that your clients suffer due to your work or advice.
These are some of the most common types of small business insurance for contractors. Depending on your specific situation and needs, you may also need other types of coverage, such as commercial auto insurance, workers’ compensation insurance, cyber liability insurance, etc.
The best small business insurance companies for contractors are those that offer flexible and affordable coverage options tailored to your industry and needs. Some examples are:
Next Insurance:
Next Insurance is an online platform that provides customized and simplified small business insurance for contractors. You can get a quote in minutes and buy a policy online in seconds. You can also adjust your coverage anytime and access your certificate of insurance anytime.
Hiscox:
Hiscox is a leading provider of professional liability insurance for contractors. They offer customized coverage options based on your specific profession and risks. They also provide 24/7 claims service and online resources to help you manage your risks.
The Hartford:
The Hartford is a trusted provider of small business insurance for contractors. They offer a range of coverage options, such as general liability, professional liability, builder’s risk, etc. They also provide risk engineering services and discounts for bundling policies.
How to Get Small Business Insurance Without Employees
If you are a sole proprietor or a freelancer who works alone, you may think that you don’t need small business insurance. However, this is not true. Even if you don’t have any employees, you still need small business insurance to protect yourself and your business from various risks, such as:
Property damage:
You could damage your own property or equipment while working from home or on the go.
Bodily injury:
You could injure yourself or someone else while performing your work.
Professional liability:
You could make a mistake or fail to deliver your work as promised to your client.
Cyber liability:
You could suffer a data breach or a cyberattack that compromises your or your client’s sensitive information.
If you don’t have small business insurance, you could face huge financial losses, legal liabilities, and reputational damages. Therefore, it is wise to get small business insurance without employees as soon as possible.
The types of small business insurance that are suitable for businesses without employees are:
General liability insurance:
This covers the claims of property damage and bodily injury that you cause to third parties while working on a project.
Personal property insurance:
This covers your personal property, such as your laptop, phone, camera, etc., from damage or loss caused by fire, theft, vandalism, etc.
Cyber liability insurance:
This covers your legal and financial liabilities in case of a data breach or a cyberattack that affects your or your client’s data.
These are some of the basic types of small business insurance that you may need. Depending on your specific situation and needs, you may also need other types of coverage, such as professional liability insurance, errors and omissions insurance, commercial auto insurance, etc.
The best way to get small business insurance without employees is to use an online platform like Next Insurance. Next Insurance is an online platform that provides customized and simplified small business insurance for businesses without employees. You can get a quote in minutes and buy a policy online in seconds. You can also adjust your coverage anytime and access your certificate of insurance anytime.
Small Business Insurance Cost Calculator
One of the most common questions that small business owners have is: how much does small business insurance cost? The answer is not simple, as there are many factors that affect the price of your policy, such as:
Your industry:
Some industries are more risky than others, and therefore require more coverage and higher premiums. For example, a construction contractor may pay more than a graphic designer for small business insurance.
Your location:
Different states and cities have different laws and regulations regarding small business insurance, and therefore different costs. For example, a small business in California may pay more than a small business in Texas for workers’ compensation insurance.
Your revenue:
The more revenue you generate, the more assets you have to protect, and therefore the more coverage and higher premiums you may need. For example, a small business with $1 million in annual revenue may pay more than a small business with $100,000 in annual revenue for general liability insurance.
Your claims history:
The more claims you have filed or received in the past, the more likely you are to file or receive claims in the future, and therefore the higher your risk and premiums. For example, a small business that has been sued for negligence may pay more than a small business that has never been sued for professional liability insurance.
These are just some of the factors that can influence your small business insurance cost. There are many other factors that can vary depending on your specific situation and needs, such as your coverage limits, deductibles, discounts, etc.
To get an estimate of how much small business insurance costs for your business, you can use a small business insurance cost calculator. A small business insurance cost calculator is an online tool that asks you some basic questions about your business, such as your industry, location, revenue, etc., and then gives you a ballpark figure of how much you can expect to pay for different types of policies.
A small business insurance cost calculator is not a substitute for getting a quote from a provider, as it does not take into account all the details and nuances of your business and its risks. However, it can give you a general idea of what to expect and help you budget accordingly.
Small Business Insurance Requirements by State
Another question that small business owners often have is: what are the small business insurance requirements by state? The answer is not straightforward either, as different states have different laws and regulations regarding small business insurance, and therefore different requirements.
Some types of small business insurance are mandatory in most states, such as workers’ compensation insurance and commercial auto insurance. These types of insurance are required by law to protect your employees and third parties from injuries or damages caused by your business activities.
Other types of small business insurance are optional in most states, such as general liability insurance and professional liability insurance. These types of insurance are not required by law, but they are highly recommended to protect your business and its assets from lawsuits and claims.
However, some states may have specific requirements or exemptions for certain types of businesses or industries regarding optional types of insurance. For example, some states may require certain professionals, such as doctors, lawyers, accountants, etc., to have professional liability insurance. Some states may also exempt certain businesses or industries from having workers’ compensation insurance if they meet certain criteria.
Therefore, it is important to check with your state’s department of insurance or labor to find out what are the minimum small business insurance requirements by state for your type of business or industry. You should also consult with a licensed agent or a lawyer to ensure that you comply with all the relevant laws and regulations regarding small business insurance in your state.
If you fail to meet your state’s small business insurance requirements by state, you could face serious consequences, such as fines, penalties, audits, lawsuits, or even criminal charges. Therefore, it is better to be safe than sorry and get adequate and affordable small business insurance for your state.
Conclusion
Small business insurance is not a luxury, but a necessity for every entrepreneur who wants to protect their business and its assets from various risks. Whether you have employees or not, whether you are a contractor or a freelancer, whether you work from home or on the go, you need small business insurance to cover your potential liabilities and losses.
There are many types of small business insurance that you can choose from, depending on your industry, location, revenue, claims history, and other factors. Some of the most common types are general liability insurance, commercial property insurance, workers’ compensation insurance, professional liability insurance, business interruption insurance, etc.
The cost and coverage of small business insurance vary depending on many factors as well. Therefore, it is important to compare different providers and policies before you buy one. You can use online tools, reviews, ratings, etc., to find the best small business insurance for your needs. You can also save money on small business insurance by bundling policies, increasing deductibles, reducing risks, etc.
The requirements and regulations regarding small business insurance also vary by state. Therefore, it is important to check with your state’s department of insurance or labor to find out what are the minimum small business insurance requirements by state for your type of business or industry. You should also consult with a licensed agent or a lawyer to ensure that you comply with all the relevant laws and regulations regarding small business insurance in your state.
We hope that this article has helped you understand everything you need to know about small business insurance in 2023. Small business insurance is not only a smart investment, but also a peace of mind for you and your business. Don’t wait until it’s too late. Get your small business insured today.