How To Choose the Right Small Business Insurance Company for You
It can be hard to find the right small business insurance company. Here are some ideas to help you get started. Find out what kinds of insurance your business needs. This includes checking to see if the company has the policies you need in the state where your business is located.
Check out how well a company can pay its bills. By looking at a company’s financial strength, you can get an idea of how well it will be able to pay its bills if you need to file a claim. As of the date of publication, all of the companies in our rating have an AM Best rating of A or higher. AM Best says that if a company has an A rating, it has a “excellent” ability to pay its bills.
Get quotes. You’ll need to find a company with the right policies, limits on coverage, and price. Getting quotes from several insurance companies is a good way to find out what your options are.
What are some kinds of insurance for businesses?
There are many different kinds of insurance plans for businesses. You can get insurance for just about anything, from general liability to kidnapping and ransom. Here are some of the most popular kinds of insurance:
If an employee gets hurt on the job, workers’ compensation insurance will cover the costs. If that happens, the policy will pay for medical bills, lost income, and disability. The Small Business Administration (SBA) says that all businesses with at least one worker must have this coverage.
This policy may also cover other kinds of risks, so you should read your policy to find out what it will cover.
Professional liability insurance, which is sometimes called “Errors and Omissions” (E&O), covers financial damages that your company might cause by making a mistake. Professional negligence and not meeting service standards are two examples.
Commercial auto insurance, which is also called a business auto policy (BAP), protects the vehicles that your business uses. If you use your personal car for business, this policy may or may not cover you. Check your policy to find out. Most commercial auto policies will cover both liability and damage to the car itself.
Business property insurance is another name for commercial property insurance. It’s like a homeowners insurance policy in that it covers both the building and its contents. This can include everything from your documents to your inventory.
A commercial property policy would help if a covered loss, like a fire, caused damage to your business’s property. Like with a homeowners policy, you can often choose between actual cash value and replacement cost when figuring out the value of covered property.
Equipment breakdown insurance is only for the business equipment you use. This could be a stove in a restaurant or a computer in a law office. It covers the cost of fixing or replacing broken equipment. Sometimes, it will also cover property damage caused by the equipment breaking down.
What is a Business Owners Policy, or BOP?
A business owner policy (BOP) isn’t just one type of insurance. Instead, it combines several different types of insurance into one policy. BOP policies usually cover both liability and property in one package.
Depending on the insurance company, it could also include coverage for business interruption or business continuation. Small business owners can also save money by getting a BOP instead of buying the policies separately.
But a BOP may not be the only insurance policy a small business needs, since it usually doesn’t cover commercial auto or workers’ compensation.
How much does insurance for a small business cost?
Because there are so many things that go into figuring out how much business insurance premiums cost and because insurance companies may use different underwriting methods to figure out how risky a small business is, it can be hard to give a clear answer about how much premiums cost. Here are some of the things that affect how much your business will have to pay in insurance premiums:
Business type. The type of business you run will have a big impact on how much your premiums will be. This is because the type of business you run can help determine what types of policies you are legally required to have and how much of a risk it is for an insurer to cover you.
For example, a commercial gym with a lot of customers, equipment, and a physical location will likely have a higher level of risk and need more coverage than a self-employed editor who works from home and doesn’t have clients come to their home.
Location. How much your business insurance costs will depend a lot on where your business is located. Some types of insurance are required by the federal government, but each state also has its own rules about what types of insurance businesses must have.