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Here's How to Choose the Best Insurance for Your Small Business

Careful planning and a lot of hard work got you and your business this far. Shopping for small business insurance should be simple and straightforward, because you have other things like deadlines, materials and employees to worry about.

Protect what you have accomplished and choose the right insurance for your small business with four steps recommended by the U.S. Small Business Administration (SBA):

1. Assess your risks. Think about what kind of accidents, natural disasters or lawsuits could damage your business. If you need help preparing for emergencies, the SBA has information for creating a response plan. A response plan may help you determine risks, so every aspect of your business is covered.
2. Find a reputable licensed insurance agent. Commercial insurance agents can help you find policies that match your business needs. They receive commissions from insurance companies when they sell policies, so it's important to find a licensed agent that’s interested in your needs.
3. Shop around. Prices and benefits can vary significantly. You should compare rates, terms and benefits for insurance offers from several different agents. Independent agents work with multiple insurance carriers. They can work with you to tailor a custom policy and make sure you have the right protection.
4. Re-assess every year. As your business grows, so do your liabilities. If you have purchased or replaced equipment or expanded operations, you should contact your insurance agent to discuss changes in your business and how they affect your coverage.
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Read more: 8 Steps to be Confident in Your Commercial Insurance

What kind of insurance does a small business need?

The federal government requires the following types of insurance for small business:

  • Disability insurance coverage
  • Unemployment
  • Workers compensation (This coverage is state specific, so check with your local independent insurance agent.)

Additionally, some states may have further requirements. Fulfilling these obligations is a good start, but don’t forget that unexpected costs can arise for your business.

It’s a good idea to protect against any peril that you can’t afford yourself. This may include things like lawsuits, natural disasters, fires and accidents. The SBA says, “Speak to insurance agents to find out what kinds of coverage makes sense for your business, and compare terms and prices to find the best deal for you.”

Read more: What is an Independent Insurance Agent? Everything You Need to Know

Ask about additional insurance specific to your business.

Consider asking about what types of additional coverages are available for your specific business. Many insurance companies offer a variety of coverages bundled together and sold as a package. They are often referred to as “plus packages” and are typically less to purchase than each coverage individually. Some coverages that are included in these packages:

  • Water back up from sewers and drains
  • Employee dishonesty
  • Outdoor property (such as fences, trees or shrubs)
  • Business income and extra expense
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Even small businesses can benefit from having Employment Practices Liability (EPLI) coverage. This covers wrongful termination, harassment, discrimination and failure to promote. There are even coverages that extend to the unique needs of your profession such as professional liability. Some professions that may want this coverage include barbers, beauticians, optometrists or funeral directors.

Another important coverage for all businesses to consider is an umbrella policy. An umbrella policy can increase your liability limits and may be required when doing work for other companies.

Your business is unique and deserves the proper coverage. Following the four simple steps from the SBA and speaking with an independent agent can ensure that it is properly protected for years to come.

Source: U.S. Small Business Administration - https://www.sba.gov/business-guide/launch-your-business/get-business-insurance#section-header-0

*Products referenced may not be approved/available in all states. Limitations and conditions may apply. Premium will be based on benefits chosen and policy rates available at time of application.

Disclaimer: This article is not expert advice. The analysis of coverage is in general terms and is superseded in all respects by the Insuring Agreements, Endorsements, Exclusions, Terms and Conditions of the Policy. Some of the coverage mentioned in this material may not be applicable in all states or may have to be modified to conform to applicable state law. Some coverages may have been eliminated or modified since the publishing of this material. Discounts may not be available in all states. Limitations and conditions may apply. Premiums will be based on benefits chosen. Please check with your local Independent Auto-Owners Insurance Agent for details."

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