You might be wondering whether you require small business insurance at all. We sincerely hope that you will never need to address the connected insurance issues. However, there are some situations that might
be devastating for a small business. In such situations, small business insurance might be the detail that will determine whether your business will exist or not.
What Is Small Business Insurance?
Small business insurance is an insurance that a small business owner might acquire to protect his/her business from a number of issues. There are plenty of insurance coverage options. But still, according to the statistical data, less than half of small business owners have insured their businesses.
If you have accidentally got involved in a court proceeding about copyright breach or if a competitor raised a claim about false advertising from your side that caused some losses for them, small business insurance can be very handy. Even if you win the case, the proceeding itself can be so costly and demanding that your business might not resist.
One more case when you must ensure your business is if your workers can get injured at work. Normally, small business insurance companies pay for the treatment, plus some money is given to the worker as compensation. The best business insurance companies cover such expenses if they arise.
There are many cases that require your business to be ensured. Every insurance firm knows about them and will offer you the most optimal plans for your business.
Our Top 10 Companies – With a Detailed Review of Each
- Next Insurance is the very first enterprise in our rating. It is an optimal option for the businesses that need all the formalities to be fixed asap. The main advantage of Next Insurance is that it provides an online tool to apply for the needed coverage. You provide the needed information, get the options, and select the one that attracts you. The lowest premiums and amazingly loyal conditions are undoubtedly benefits, too. The only drawback is the absence of a property insurance variant.
- State Farm is one more firm that deserves your attention. This is a company where you can get a thorough consultation on any insurance type. The agents will explain to you all in the smallest details and help to choose the variant that suits your business indeed. This company is famous due to the fact that its employees never impose more expensive variants for the sake of profit. The firm provides all the existing coverage variants. The only drawback (if it is a drawback indeed) is that it is impossible to get the price for any plan just for informational purposes. All the financial aspects depend greatly on the specifics of the business and the industries where it operates.
- Insureon is a place where you can find the most affordable prices. It is not a company. It is a specialized marketplace for those firms that offer insurance services. Therefore, we will not compare it with enterprises. This is just to inform you that such an option exists, and you can use it to look for the most affordable offers.
- The Hartford is the best firm to acquire a BOP or a Business Owner’s Policy. The BOP of Hartford is known and loved by business owners. While other firms include only the property insurance and the general liability variant in this package, with Hartford, you also get the business interruption add-in. You can also extend the coverage by adding as many more options as you need. It is a convenient option for those who are going to expand their businesses.
- Chubb is a firm that is recommended for businesses that operate internationally. It offers packages developed specifically for those who either travel or send their employees abroad. So, if your business works with international partners, you might consider Chubb plans. You can select between options for a bigger and a smaller enterprise. A 24/7 assistance for those who are abroad is also included in the plans. Chubb also offers traditional plans. There are standard options, and clients can also customize a standard plan. With this firm, you might count on around 80 USD per month in premiums.
- Lloyd’s of London Coverages deserves special attention from those business owners who are active in risky industries. If your business operates in such fields as medical, healthcare, construction, and similar, you might find it difficult to get insurance from a standard firm. This company offers so-called surplus line plans for those business owners who are rather daring and love risks. Here, anybody can get a plan without any issues. The standard insurance plans are available, too. Consider though that if your aim is a surplus line plan, you will definitely pay more than for common insurance.
- Founder Shield is again not a company but a platform. This time, you can find their companies willing to work with startups with potential. To such startups belong, companies working in e-commerce, fintech, biotech, and similar. On this platform, you can check for the optimal insurance for your startup. The insurance type and a monthly premium usually depend on the type of your startup, on the sum that you have raised, and on some more specific factors.
- Hiscox is a company that offers a breathtaking number of variations. They have around 9 industries, with 70 professions covered. The company offers standard packages that can be customized. For a small business operating in a non-risky industry, a plan can cost around 30 USD per month. Here, we speak about the standard General Liability version. If you want to add special features, it will cost more.
- Travelers is a company that concentrates its attention on businesses that might send their workers on business trips and on startups. Along with the standard packages, some specific plans are developed. Customers might also consider a lot of nice add-ins that are not always available by a standard firm: insurance from identity theft is one of them.
- Farmer’s Insurance is one more specific firm. It has nicely developed plans for bicycle shops and boutiques. It is difficult to explain such a choice, but as long as customers are happy. Along with standard plans, it offers specific ones, too, such as tuitions and fees.
How We Chose the Best Small Business Insurance Companies
Can you really count on your insurance firm if something happens? It depends greatly on what business insurance providers you have chosen. While some of them are absolutely reliable, others might do their best to leave you alone with your problems. We include in our rating of recommended enterprises, only those that comply with the following requirements:
- Financial strength is the main criterion. Some providers have the best plans indeed. They offer compensation for whatever might happen. If a provider isn’t financially stable, though, such plans and promises don’t mean much. If the worst happens and your business requires assistance, such a company will vanish. That’s why we always check whether the firm is financially stable enough. We mention here those companies who guarantee that the compensation will be paid out.
- Profession- or industry-related coverage can be acquired. Some companies have a lot of experience and know the market very well. They have developed specific packages. You can choose one that is related to the industry you are operating in.
- Customer service is willing to help. If an accident happens, you want to get help asap. Therefore, friendly and helpful customer support agents are a must. They shall know all the details of your package. Then, the needed assistance will be provided on time.
- Costs of small business insurance. Some firms believe that if you are a businessman, you should be rich. That’s why their prices are skyrocketing. Smart businesses never do so. The most reliable small business insurance companies offer policies that will not empty your budget.
- Feedback from clients is crucial. Even if the company complies with all the indicated requirements but has negative reviews, we omit it. Commercial insurance companies that don’t take care of their clients are not worth attention. If a firm has bad reviews, most likely, they have some problems. The clients are going to face the same problems.
- The company is present on the entire territory of the USA. You never know how much your business is going to expand. And you never know from which part a problem might come. The best business insurance firm shall be able to protect you wherever you are and wherever the protection is needed.
- Procedures to process a claim shall be fast and fair. When you are in need, you don’t want to fight for the funds that belong to you, do you? Experienced small business insurance companies offer several options to submit a claim and to track it. Many advanced firms offer special and very convenient online tools for all the claim procedures.
Do You Need Small Business Insurance?
Here, you don’t have any options. If you run a small business, you need insurance. Many business owners don’t realize it until the worst happens. The best small business insurance will provide you with the solid protection of specific claims; it will cover the expenses for the treatment of your workers if they get an injury at work. Your insurance firm will cover all the expenses connected with the most unpleasant situations.
Moreover, you need the best small business insurance if you hire people to work for you. And it is a must to have one if people work in hazardous or potentially dangerous conditions.
How Does Small Business Insurance Work?
We can make a comparison of small business insurance with personal insurance. Like in the case with personal insurance kind, business insurance offers some protection for your business in some cases. And the cases depend on the firm from which you have purchased the plan and on the plan itself.
There are many small business insurance offers. Therefore, it is crucial to select a suitable plan for your enterprise. A good and experienced broker or a representative of one of the best business insurance firms can help you to make the decision. Make sure you get a plan with the needed coverage. Compare the prices for the insurance and the cap. You shall be sure that the company will have all the expenses covered and that you don’t overpay.
Why Small Business Insurance Is Important
Some business owners believe that even the best small business insurance is just a waste of their precious funds. The real situation is different, though. If you consider starting a business, you should consider getting the best small business insurance. It protects your firm. And it protects your assets, both financial and personal.
The world is unstable. The economic situation might change completely at any moment. A proper insurance plan will protect you and your employees from the harsh changes and support you all at least to the extent needed to make your firm survive and move on.
Competitors are sometimes merciless. You can be accused of copyright infringement, causing losses via advertising or negative feedback about one or another company, and similar.
Court proceedings in such cases take a lot of time and money. You might become involved for months or even years in the process. Even if you are not guilty and win the process, all the expenses might exhaust your company to the extent that you will need to close it. If you have any type of small business insurance from one of the best small business insurance companies, your expenses would be covered by the company.
Types Of Small Business Insurance Plans
If you want to select the best insurance plan, you will be surprised by their variety. An experienced company will offer you a good number of them. We will leave out those that are required by law:
- Workers compensation;
- Unemployment insurance;
- Disability insurance.
You don’t have a choice whether to acquire them or not. You must do it based on valid legislation. When it about other insurance types, you have a choice. The main variations of insurance for small business are the following:
General liability insurance: if you are serious about running a business, this insurance shall be number one in your list after you have bought the mandatory ones. If your property, business, services, or whatever connected with your business is the cause of any injury of a third party, this insurance will cover your expenses to regulate the case. The mentioned third party might be your client, a visitor, a vendor, and so on. This insurance type is useful if something of the following happens:
- The third-party for being physically injured;
- The third-party has damaged property or causes damage to any business while working for you;
- If the damage was caused by advertising.
This insurance is a must-to-be option if your operation field is the industry where dangers exist. It costs around 400 – 600 USD per year on average. The price is absolutely reasonable if you think about the benefits that you get with it. It is worth considering though that the price might be significantly higher if your business operates in risky industries.
Insurance of commercial property is one more type that you could consider. It will compensate you for all those accidents and unpleasant situations that might happen with the business property.
It is small business insurance that you should consider if you don’t work completely online and if you have any physical business property.
If something from your business property is damaged, stolen, vandalized, the insurance provider will compensate for it. Again, don’t forget to check the cap. If you have super expensive equipment or work with exclusive objects, you might consider buying a package with a higher cap.
If you decide to purchase a commercial property insurance plan, make sure you have an additional 1,000 – 2,000 for premiums. If the business property is valuable, consider getting a more expensive plan or adding additional terms if the firm policy allows. One of the most useful add-ins is insurance from business interruptions.
For instance, if your business property or even office building were damaged because of a flood, fire, or for any other reason, you might need some time to restart the business. You will be required to buy new appliances. Then, you might need to repair or even rebuild the office. Even though you will get some insurance money to manage it, but such works take time. During this time, you will not be able to run your business. And it is connected with big losses.
If you have this liability insurance plan, you can arrange the things calmly. The insurance firm will compensate you for the forced losses.
And those whose businesses work with crucial data cyber add-in is a must.
Professional liability also shall be insured. This variation of insurance is specific. If you work in a medical or legal field, it is a must to acquire it. This insurance protects you and your workers in case of an error, an omission. For example, if a specialist or a service provider makes an error, such insurance will cover the expenses in the case if the client files a complaint:
If a doctor makes a mistake and the patient’s health deteriorates or if the patient dies, the liability insurance firm will cover lawsuit expenses;
If a web developer doesn’t complete the order, say, a website, on time, the client might suffer huge losses. And such a client will, for sure, raise a claim against the developer. If the developer has the mentioned professional liability insurance, he/she is protected if such a case occurs.
The mentioned professional liability insurance is reasonable in specific fields only. Normally, those are services. If you believe you need one, consider an additional 900 – 2,000 USD yearly from your budget to spend on it.
Product liability insurance is a needed option for those who work with products. For example, you sell some products. However, they are manufactured by a different enterprise. They also might be packaged in a different place. But your customers get them under the brand of your business.
If the manufacturer has made a product with a defect or if the packing company didn’t pack it as required, the customer will accuse you. Your brand is on a package. If your client sues your business, you will be protected.
This small business insurance works in a way that differs from other options. Here, you pay a particular sum of premium for a particular sum of goods sold. On average, this option costs around 25 cents for each batch of products sold at 100 USD. This variant is affordable, indeed.
EPLI or Employment Practices Liability Insurance protects the business owners from illegal claims raised by employees. There are always people who believe that there is nothing bad about getting some bucks from a businessman. They don’t think about your hard work and feelings. For such cases, this type of insurance exists.
You should consider getting this small business insurance if you hire people. This variant can save you thousands of dollars and costs just around 700 to 3,000 USD per year on average. Consider though that the sum will depend on the number of employees, the turnover, and whether you have ever had such issues in the past.
Key person insurance is a very specific option. You might consider it if you want to pass your firm over to your children or other people.
If a business owner dies or becomes disabled and cannot manage the company anymore, a transition process is needed. All the procedures take a lot of time and money. Many businesses never recover after it.
If you get this insurance variant, though, you can protect your business during the most difficult time and make it less vulnerable. The money paid by the best small business insurance company will help to find and hire a specialist to maintain the business until everything stabilizes.
How Much Does This Insurance Variant Cost?
While in the case with personal insurance, for example, everything is more or less clear, the costs for business insurance might vary from a couple of hundreds to several thousands of dollars. It all depends on the specifics, size of your firm, how many employees there are, the prices for equipment and property, and so on. It even depends on the industries in which you are operational.
Consider also that along with the non-mandatory options; you should purchase and pay for mandatory insurances. Again, the more workers you have, the higher the costs are going to be.
Key Considerations When You Buy This Insurance Option
Before purchasing any insurance, consider carefully whether you need it. Leave the mandatory variants; you cannot avoid getting them. When it comes to non-mandatory variants, though, you have many options.
Check whether the option is absolutely needed. Calculate the probability that an unpleasant situation will happen. Check how much it is going to cost. Calculate the insurance premiums. Is it worth buying? If still yes, consider the option. For example, if your company operates online, getting property insurance is not reasonable. If you don’t have employees, EPLI is not needed at all, and so on.
Is your budget enough to get one more add-in? If you cannot indeed afford to pay for a particular add-in, skip it for now. Consider those options only that are a must, and you can pay for them.
PROS & CONS Of This Insurance Type
This is one of those few insurance types that have objective benefits, but the drawbacks are rather due to personal factors. This insurance variant is developed to protect your firm from all the problems that otherwise would stop its function. Business owners should check though what exactly they need. If you see that you might never face the potential problem, don’t get the insurance for it.
Business owners are vulnerable. They risk their funds and their health. This insurance type was developed with the consideration of all the aspects of running a business. Businesses are so varied and multi-facet that there are plenty of plans and their variations. Your task is to select the plan that protects you and your firm from all the major risks. If you buy more than that, you waste your money.