More than other businesses, small businesses are at risk of running their businesses into bankruptcy and having to close down in the face of financial loss. This is why having insurance and bond for your small business is essential.
Below we talk about the needs and risks of small businesses and how bonds and insurance for small businesses can help mitigate business risks and help them stay financially stable.
Types of Insurance Needed by Small Businesses
Property Insurance
This type of insurance covers damages to or loss of physical assets, such as buildings, equipment, and inventory. This insurance pays a business when its assets are damaged or destroyed due to insured events like fires, storms, theft, or vandalism.
Such an insurance policy can help small businesses recover from unexpected losses and continue operating, even if they suffer significant damage. Additionally, this type of insurance can protect a business's reputation by shouldering the costs of liability claims if someone is injured on the business's property or if the business is sued for damages.
Liability Insurance
This type of insurance protects against liability claims over physical injury or property damage caused by the business's operations or services.
Small businesses need liability insurance to protect themselves from the financial consequences of these types of claims, which could potentially result in bankruptcy or business closure.
By helping cover the costs of legal defense, settlements, damages awarded in a liability claim, and medical expenses for injured parties, this type of insurance can go a long way in protecting a small business's reputation and financial health.
Business Interruption Insurance
This type of insurance covers lost income and expenses resulting from a temporary interruption of the business's operations. Such insurance can help protect small businesses from financial losses due to inevitable disruptions in their operations caused by power interruptions, fires, natural disasters, or similar causes.
Business interruption insurance covers the costs of lost income and expenses a business would have incurred had it been able to continue operating. This insurance may also cover the costs of relocating if the business's current location is damaged or unavailable.
Professional Liability Insurance
This type of insurance, also known as errors and omissions insurance or malpractice insurance, covers claims of negligence or error made against professionals like doctors, lawyers, or accountants.
In the event that employees commit errors while performing professional work for a small business that offers professional services, the insurance company compensates the affected third parties on behalf of the small business.
This type of insurance covers the costs of legal defense, settlements, and damages to help protect the business's reputation and finances.
Workers Compensation Insurance
This type of insurance covers medical expenses and lost wages for employees who are injured on the job.
When employees or workers suffer bodily injury as a result of working for a business, this insurance protects the employees by providing them financial support for their inability to work and to receive necessary medical care.
Besides managing financial losses, this insurance also helps small businesses become more reliable employers, encouraging employees to trust in the company and its capacity to support employees despite the risks that come with working.
Health Insurance
This type of insurance covers medical expenses for the business's employees. A business may be required or choose to provide health insurance to its employees as a way to attract talent or increase employee satisfaction and retention.
Depending on the coverage of the health insurance, employees of small businesses may be entitled to inpatient and outpatient medical care, prescription drugs, preventive care, mental health treatment, rehabilitation services, and in some cases, dental and vision care as well.
Surety Bonds
There are certain business risks that insurance alone cannot mitigate. Hence a surety bond may be required by law or by business partners for a business to operate in certain industries.
Small businesses typically get a surety bond to comply with regulatory requirements, to protect customers against financial loss due to the business failing to perform its contractual obligations, and to show good faith in entering partnerships either as a contractor or supplier.
Examples of surety bonds that small businesses may be required to get include license and permit bonds, bid bonds, or performance bonds.
Purchase Insurance for Small Businesses
Protect your small business against unprecedented financial loss, which can lead to bankruptcy or business closure, by getting a bond and insurance for small businesses. Reach out to our dedicated team of professionals and save time and money finding the right insurance policy for your small business.
We have 10 years of experience helping businesses find the right insurance policy with the right coverage for their businesses. To get a free quote, contact us at 888-306-7887 at Stampede Insurance Services today!
