How to Make Sure Your Business Has the Insurance Coverage You Need
Aug 23, 2024
2 min read
You don’t want to pay for insurance coverage you’ll never use. But having the right amount of insurance can help save your business from disaster. You could be overlooking crucial areas when you’re buying or renewing your business insurance policies.
What Types of Business Insurance Do You Need?
Whether you’re deciding how much business insurance you need for an LLC, sole proprietorship or a limited partnership, here are some top types of small business insurance and what they cover. Not every business needs one of these policies, but knowing what they are and why you might need them can help you make the right decisions for your company.
General Liability
A general liability policy covers medical expenses and legal fees for injuries or property damage from your company’s products, services or operations. Business liability insurance includes coverage for libel, slander, copyright infringement and harm to a reputation.
Who needs it: Most business owners.
Commercial Property
Commercial property coverage protects the building where your business is located (if you own it) and/or your business property from loss due to fire, theft, storms and more. Property could include computers, furniture, signage, documents and inventory.
Who needs it: Any business owner operating in a physical location who may be financially affected by losing these assets.
Business Interruption
Business interruption insurance covers lost income if you need to close your business to make repairs due to claims under your commercial property policy. It may cover wages, taxes, loan payments, rent or relocation costs.
Who needs it: Business owners at risk of interruptions in their operations. This coverage is ideal for businesses that rely on a physical space to operate, like brick-and-mortar stores or farms and ranches.
Business Owner’s Policy
Business owner’s policy usually rolls together liability, property and business interruption insurance, typically at a discount.
Who needs it: Anyone who needs the subcategories of insurance it includes and who could lower their business expenses by bundling them.
Workers’ Compensation
Workers' compensation (or comp) covers your employees if they get sick or hurt on the job. That could include medical care, lost wages, disability benefits and funeral costs.
Who needs it: Most business owners who have employees. The state where you operate your business may have specific requirements.
Commercial Auto
You’re probably familiar with personal auto coverage. Commercial auto policies are similar, but unlike personal car insurance, they cover business vehicles.
Who needs it: Any business owner responsible for company cars, work vans, service trucks, box trucks, work trucks or similar vehicles.
Professional Liability
Professional liability insurance, also known as errors and omissions, covers you against claims if you are negligent, make a mistake or overlook something in your business practice.
Who needs it: Typically, you’ll want this coverage if you’re in a field where you could be sued for a professional mistake. It’s a smart choice for doctors, real estate agents, accountants, architects, lawyers and more.
Product Liability
A product liability policy covers claims that your product caused injury or property damage to someone.
Who needs it: Business owners who sell products, such as manufacturers, retailers, wholesalers and distributors.
Cyber Liability/Data Breach
Cyber insurance covers losses from data breaches and cyberattacks. Cyber liability insurance helps companies comply with legal regulations that require businesses to notify customers of a data breach and can also cover legal fees, data monitoring and the costs to recover compromised data and computer systems.
Who needs it: All companies that use technology to do business. Cyber insurance is especially important for small businesses — in 2023, 61% of cyberattacks were aimed at small and medium-sized companies.
Get the Business Insurance Coverage You Need
It can be tough to sort out exactly what policies and how much liability insurance you need for your business. A Farm Bureau insurance agent can ask you about your business, explain what coverage you might want and talk you through your options. Reach out today to make sure your business can handle the unexpected.