With small businesses occupying such a prominent place in the United States’ economy, small business owners must remain conscious of the various risks that those businesses face. With the threat of losses seemingly hovering around every corner, how should businesses respond? Business insurance can help protect against these various losses.
While businesses of all types and sizes, including global corporations, utilize business insurance, according to the U.S. Small Business Administration’s 2019 Small Business Profile, a full 99.9% of all businesses in the United States are small businesses. So, what exactly is small business insurance?
Primarily, what we know of as business insurance is actually a combination of different types of coverages. All are geared towards helping companies protect themselves from losses related to circumstances outside the ordinary as well as everyday business activities. These insurance policies can protect against physical and intellectual property losses, and the financial assets of the companies that purchase them.
Just as there are myriad types of businesses operating in the US, there are multiple risks unique to each business industry and individual company. As a result, a broad selection of different business insurance options exist. Companies typically craft a unique business insurance plan consisting of the coverages that best fit their needs, including considerations like number of employees, the sector of business involved, vehicles or materials used, and more.
Building a business insurance policy that covers all significant areas of risk is an essential way to protect a company from incurring losses should the worst happen. Companies typically choose from these general types of small business insurance:
While the above insurance types are general, most insurance companies offer a wide range of business insurance products that can be combined to create a custom business insurance policy. This policy serves as a contract between the business and the insurance provider in which the provider agrees to share some of the business’s risks in exchange for regular premium payments. If the business experiences a covered loss, the owner will need to file a claim with the insurance provider.
Some types of business insurance – such as disability, unemployment, and workers compensation insurance – are legally required to protect employees. Other types of insurance may be necessary as well, depending on state and local jurisdiction.
It is also essential to protect a business’s financial assets. Business insurance can help keep a company running in times of fire, natural disaster, or economic uncertainty. Just as importantly, business insurance protects against liability from lawsuits as a result of product or service issues. Although policies are often not inexpensive, paying for business insurance now can protect against potentially devastating losses in the future.
If you are interested in even more business-related articles and information from us here at Bit Rebels, then we have a lot to choose from.
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