Small Business Insurance Mitigates Risk
Small business insurance offers a wide variety of coverage options for business owners. A small business is one with less than $5 million in sales annually and fewer than 100 employees. Small business insurance commonly combines several types of insurance coverage together. With convenience and customizable small business insurance coverage options offered, finding the right insurance for your small business requires a close look at what types of risk your business is exposed to.
The most common risks include liability for negligence, responsibility for property, and loss due to an accident or emergency. When putting together a business plan, additional risks present themselves and small business owners need to transfer this risk where possible.
A small business insurance policy can include property insurance, liability insurance, crime coverage, equipment breakdown insurance, and many others rolled into one conveniently packaged policy. Insurance for small business owners protects from:
- Property claims
- Equipment breakdown
- Income loss due to emergency shutdown
- Fire in a plant, warehouse, office or storefront
- Legal liability claims
- Premises and property liability claims
- Professional liability claims
- Products and completed operations claims
Business equipment insurance is as important to business operations as the equipment itself. Telephones, computers and electrical systems are all vitally important. Many production operations are heavily dependent on a variety of machines. Businesses use machines to communicate with customers, heat and cool the building and to create, store and sell their products. Damaged equipment means lost income, so insurance companies offer comprehensive insurance for equipment breakdowns to mitigate the risk associated with technology. For example:
- A power surge damages your computer network
- Your boiler explodes, causing your business to shut down temporarily
- An employee damages your only production machine
Most standard property insurance policies do not provide insurance for the typical causes of equipment breakdown. Small business insurance should address this risk and provide equipment breakdown coverage against damage inflicted by power surges, motor burnout, mechanical breakdown, boiler damage and operator error. Equipment coverage typically pays for:
- Costs associated with the repair or replacement of damaged equipment
- Time and labor costs to repair or replace the equipment
- Expenses incurred to limit the loss
- Expenses to restore the equipment urgently
- Replacement cost of spoiled stock or materials