When’s the right time to get business insurance? 10 signs it’s time to buy
Whether you’re an entrepreneur hitting record growth or a sole proprietor just getting started with a few side gigs, business insurance is an excellent idea for protecting your business assets. Not only that—it might be legally required, depending on factors like your location and industry.
And that’s a good thing. Small business insurance covers expenses when the unexpected happens—whether equipment failure, property damage, or a litigious client. Without it, your company could face significant financial losses, including court fees and legal payouts.
With all the insurance options floating around, you might wonder what kinds of policies are suitable for your company and when to add the protection of small business insurance. Huckleberry can help. Below, we break down the most popular policy types and 10 signs it's a good time to invest in small business insurance.
Most popular types of small business insurance
Entrepreneurs have a range of policies to consider—from more broad coverages like general liability insurance to the incredibly specific (like spoilage insurance, which covers food and beverage loss for restaurant owners). Depending on your business needs, you may need a variety of insurance policies; best start by looking over the most common types of coverages.
What are the different types of business insurance?
Here are a few of the most commonly-needed kinds of insurance. These are just a starting point—you can discover more at Huckleberry.
- Workers’ compensation: Covers expenses related to an employee getting sick or injured because of their job. Workers’ comp may pay for things like lost wages, hospital bills, and doctors’ visits.
- General liability insurance: Also known as business liability insurance. General liability insurance covers your small business in case somebody sues you for property damage or bodily injury.
- Business property insurance: Sometimes known as commercial property insurance, this is a two-layer coverage that protects not only the building you do business out of but the other business-related items inside your building.
- Business interruption insurance: Helps keep your business afloat if you have to stop operating for a covered reason. Business interruption insurance takes care of payroll and rent while you get back on your feet.
- Commercial auto insurance: This policy covers vehicles owned by your company and used for business purposes.
- Hired and non-owned auto insurance: Helps cover expenses if someone from your company hurts someone or something with a vehicle not owned by your business.
- Professional liability insurance: Otherwise known as error and omissions insurance, this policy covers legal fees and lawsuit payouts associated with a mistake that causes personal injury or otherwise harms a client.
- Equipment breakdown insurance: This covers the cost of repairing or replacing equipment that is vital to your business if it stops working.
- Business Owner's Policy: Also known as a BOP, this is a convenient bundle of the most commonly-needed policies like property, general liability, and business interruption insurance.
- Employment practices liability insurance: Also known as EPLI, this coverage safeguards your company if an employee ever takes you to court over wrongful termination, discrimination, or harassment.
What type of business insurance do I need?
First, make sure you have the legally required coverage. For example, most states require small business owners with at least one employee to purchase workers’ compensation insurance. If your company owns cars, you’ll need commercial auto insurance; and liquor liability insurance is necessary for getting a liquor license. So, check your state and local governments for their requirements.
Then, think about what you’d have a hard time paying for if the worst happened. Regardless of legal requirements, some types of insurance are just smart to have.
Are you dependent on specialty equipment for daily operations—say, top-of-the-line lawn mowers for your lawn care business or an industrial espresso machine for your coffee shop? Those might be worth protecting with equipment breakdown insurance.
Next, think about your business risks. How dangerous are the jobs your employees have to do? Small business insurance can provide for both you and your employees if there’s an accident or injury on the job.
Long story short: If you couldn't quickly pay for hospital bills, lost wages, legal fees, or the replacement of commercial-grade tools, that's a good indicator you need small business insurance.
What are the benefits of getting business insurance?
There are several benefits, and they affect almost every aspect of your business—seriously.
When you consider that having insurance covers legal bills and medical expenses and allows you to rent or own property, and could help you land more prominent clients, the benefits of small business insurance begin to look more like necessities.
This brings us to...
10 signs it’s time to buy small business insurance
Still not sure which policies are right for you? Here are a few signs you need to invest in business insurance policies:
1) You have employees.
If you have employees, you must have unemployment, disability, and workers’ compensation insurance in most states. The number of employees also factors into your final quote.
And if you’re thinking of adding or laying off a few employees, you’ll need to adjust your current policies accordingly.
2) You need to rent a property.
Before you can set up shop in that new storefront you’ve had your eyes on, keep in mind that most landlords require you to have property insurance and general liability insurance before they’ll approve a commercial lease.
3) You use vehicles.
Whether or not your company officially owns a vehicle used for business, you'll need to have insurance for it. If your business owns the car, you'll need commercial auto insurance. If the vehicle does not belong to your business, you’ll need hired and non-owned auto insurance.
4) You have special equipment.
If you have equipment that would be difficult to replace on your dime, equipment breakdown insurance and business personal property insurance would be wise to have—and don't forget to expand this coverage if you get new equipment.
5) Your clients need you to have it.
Depending on your industry, specific customers and suppliers will need proof of certain types of insurance. For instance, larger contracts might require professional liability insurance.
6) You want to grow your business.
Having appropriate business insurance coverages might be required before securing that loan or license you need to take your business to the next level.
7) Your business structure changed.
Did you shift from sole proprietorship to a partnership or nonprofit to B-Corp? You might need to update your insurance policies to reflect that.
8) You’re making more (or less).
Your business income is directly related to the amount of coverage you need, so it’s a good idea to adjust your policies as you experience pronounced increases or decreases in cash flow.
9) Your business has changed locations.
Whether you’ve moved to a larger space, added locations, or changed states, you’ll need to update your information and possibly adjust your coverage.
10) You've expanded your professional services.
Insurance coverage can change depending on the types of goods and services you offer. If you started selling food and beverages inside your book store, for example, you might need to add spoilage insurance or another policy made especially for restaurants.
How much does business insurance cost?
Usually, the more dangerous the occupation, with more employees and more revenue—the more you'll pay.
For example, a large logging company with dozens of employees would probably pay more than, say, a home-based soap-maker with a sole proprietorship.
Huckleberry considers your location, company size, and revenue to give you the coverage you'll need—whether you're a lumberjack or soap connoisseur.
Gain peace of mind with Huckleberry
Now that you have a better idea of the kinds of policies you need for your new business, you might be wondering how to get your application started quickly and painlessly with the best coverage?
Is such a thing possible?
It is. That’s where we come in.
With Huckleberry, safeguarding your small business is as fast and easy as preparing a cup of coffee.
With traditional insurance companies, an application process via an insurance agent can take days or weeks to get a quote (and no telling how much longer with COVID-related delays).
Huckleberry can meet your insurance needs with a simple online application.
And when we say simple, we mean:
- Fast. We pride ourselves on getting you an insurance quote in as little as 5 minutes.
- Straightforward. You fill out a short online form that asks a handful of quick questions (like your location and the size of your company), and we’ll do the rest.
- Headache-free. We don't leave you hanging with pages of paper to keep track of somehow. Your application is all online in one place to make your life easier.
Whether you need workers’ compensation insurance, general liability policy, or a Business Owner’s Policy, Huckleberry gets your company the right coverage to meet any challenge life throws its way.
After all—not only does having small business insurance keep your company safe, it allows you to lease the property you need and secure important contracts that keep your business thriving.
It only makes sense to protect your hard-earned business when there’s so much to gain in return.
Head to Huckleberry and click the “Instant Estimate” button to get started.