Did you know that out of the 32.5 million small businesses in the U.S., about 82% fail because of cash flow problems? So whether a company is hacked or faces a financial dilemma, these problems can cause some to close their doors.

It’s pertinent to plan ahead and have strategies in place to protect your business. One way to do this is through business insurance. Read this guide on the different kinds of business insurance available today.

Professional Liability Insurance

Professional liability insurance (errors and omissions insurance) covers you against negligence from failure to perform or mistakes that occur. This insurance can be customized based on the needs of your business.

Clients, customers, patients, etc. might sue you for damages or an injury. Professional liability insurance covers you for items not covered under general liability. You could also have specialized coverage added for industry-related incidents.

Cyber Liability Insurance

One of the largest digital breaches occurred at Yahoo! in August 2013. It affected three billion accounts.

Cyber liability insurance will protect your company if digital data is compromised. It covers expenses incurred by customers and your own operational needs. Expenses could include: ransom payments, relations expenses, digital security, and more.

Key Person Insurance

Key person insurance is there if you or another core employee can’t work because of a disability or death. It can cover expenses, hire a replacement, or pay for lost income.

Workers’ Compensation Insurance

Small business owners with employees will need workers’ compensation insurance. It covers employees expenses for medical treatment, death, and disability because of an on the job injury or work related illness.

Even if you don’t have a high-risk job site, it’s still vital. Most states and countries require businesses to have this.

Business Owner’s Policy

A business owner’s policy is a package with multiple insurances. It could include general liability, business interruption, auto, property, and other forms of insurance.

Many insurance carriers will allow you to pick the insurance policies that work best for you. Having a business owner’s policy will often offer you savings compared to individual policies.

Within the business owner’s policy, you could have business income insurance (business interruption insurance). It’ll protect you financially if an event or disaster stops you from running your business. Business income insurance reimburses you for ongoing expenses; rent, business income, taxes, and payroll.

Equipment Breakdown Insurance

Equipment breakdown insurance can be added to your existing commercial property insurance or as a standalone product. It’s great to cover losses because of machinery or other critical equipment. It also covers breakdowns or malfunctions because of mechanical or electrical issues.

Property Insurance

Whether you own or lease a space, property insurance is necessary. It covers signage, equipment, furniture, and inventory if there’s a theft, a fire, or a storm.

Earthquakes and floods aren’t normally covered. You’ll want to talk to your insurance agent about this protection to see your options.

Commercial Auto Insurance

Commercial auto insurance protects you and your employees using company-owned vehicles. It could also cover bodily injury or property damage from an accident. Personal car insurance policies don’t cover third-party claims for business-owned vehicles.

It covers:

• Damage to someone else’s property
• Driver injury
• Damage to your vehicle
• Injury to someone else

Covered vehicles could include:

• Service utility trucks
• Vans
• Cars
• Box trucks
• Food trucks
• Service utility trucks

They tend to have higher coverage limits than personal policies. If you use a company vehicle, then you need commercial auto insurance.

Home-Based Business Insurance

Homeowner’s policies don’t cover your business if you work from home. Home-based business insurance could pay you for injuries related to the business, property damage, lawsuits, and employee injuries.

Home-based businesses that might need this insurance include:

• Online goods sales
• Web design firms
• Caterers
• Tax preparers
• Photographers
• And more

Home-based coverage could include:

• Accounts receivable- If records are lost because of a problem in the policy, it reimburses you for the amount
• Business liability- Coverage if your business is sued for legal defense and settlements
• Business property- Protects your equipment and property, including cooking equipment and cameras
• Loss of income- Receive the money you need for payroll
• Electronic data processing- Data processing equipment such as servers, laptops, and phones

The Required Business Insurance

Depending on your location, some forms of insurance will be a requirement. Some states require business insurance by your industry.

Speak with an insurance agent to understand state business insurance laws and requirements. Insurance agents can help you customize an insurance policy to comply with regulations.

It’s also important to keep in touch with your insurance agent and make changes to your policies as necessary. As your business grows, requirements can change.

Understanding the Different Kinds of Business Insurance

After exploring this guide, you should better understand the various types of business insurance.

While not having the proper insurance can be scary, you don’t have to go it alone. Contact us today, and we’ll develop a customized package for your needs.

If you have questions along the way, we’ll answer them. From commercial flood to cyber liability insurance, we have various options for you to choose from!