The definition of a “good” small business insurance policy will vary depending on the client, the insurer, and the sector. Nonetheless, there are some core tenets that all good SME insurance policies do share. The name and reputation of the business insurer should always be an important area of consideration before signing up with them, but reputation alone is insufficient information for making a final decision.
The general policy and the contract’s specific terms & conditions should also be properly scrutinized by the business owner and/or their expert representatives. Focusing on coverage, the following are some of the most essential areas that small businesses should be protected against by their respective business insurance policy.
Property Damage
Property damage should be the first thing that a good policy for business insurance coverage should protect against. The coverage should ideally pay for both:
- Property damage caused by the insured business.
- The cost of replacing or repairing damaged business equipment.
To avail coverage for both first-party and third-party damages, make sure that the policy you opt for includes both general liability insurance and commercial property insurance. There will be slightly different, additional clauses, terms, and conditions, depending on the insurance provider.
Commercial Vehicles
Generally, no other piece of business property is more at-risk of receiving damage than commercial vehicles. If a business owns one or more commercial vehicles, its business insurance policy must cover them as well. It does not matter whether the company owns a single van or a fleet of trucks, it is essential for their policy to include commercial auto insurance. In some situations, the business owner may need to take out the commercial vehicle insurance policy separately, but it could also be included in their original business insurance policy. It varies from insurer to insurer.
Lost Wages
When people think about lost wages, they immediately relate it to worker’s compensation insurance. That is an accurate connection because worker’s comp is a legal requirement for most businesses that have even a single employee. However, small business owners will often lose even more money than their workers after a mishap. Adding business owner’s coverage to worker’s compensation insurance can help small company owners address this issue to a great extent, especially in times of emergency.
Professional Liability
Professional liability insurance, aka errors & omissions coverage, is considered mandatory for doctors, lawyers, accountants, and other skilled professionals. Even if the business owner himself/herself is not a skilled professional, they may need professional liability coverage to protect their firm, clinic, or practice against lawsuits.
Also, note that it’s best not to sign up for multiple separate policies from the same or different providers because it could get very confusing and expensive. Always look for comprehensive business insurance plans. The fewer plans there are, the easier and cheaper it will be to manage and maintain the company’s growing insurance needs down the line. Also, complete package deals will always be cheaper than having to pay for them separately.
