Starting a small business can be an exciting yet overwhelming venture. At the same time, you may come across some risks. So, if you want to avoid as many risks as possible, getting SME business insurance is essential. But another thing is that it can be difficult to look for comprehensive SME business insurance. Fortunately, nowadays, tailored small business solutions are offered by many insurance companies.
As you know, every business is unique, so there’s no such thing as an insurance that fits for all. If you’re looking for the right insurance for your business, here’s how you can get exactly what you need.
The Importance of Insurance for Small Businesses
1. Risk Mitigation
SME businesses are prone to risks, especially since there are many other larger, more established brands around the world. In addition, there are other threats, such as accidents, theft, and natural disasters. Fortunately, SME business insurance can help mitigate these risks by providing financial assistance in case the aforementioned incidents happen to your small business.
2. Legal Requirement
Another reason why most businesses avail of SME business insurance is because it’s a legal requirement. Of course, if you want to be acknowledged by the local government, there are other requirements you need to fulfil aside from getting insurance.
Meanwhile, if you want to maximise your investment in insurance, it’s best to get comprehensive business insurance compared to the basic policy.
3. Gain Credibility and Trust
As a small business, it’s hard to gain the trust of your target audience, especially if you’re a start-up. Fortunately, one of the plus points is when you have business insurance. If your business does, prospective customers, partners, and suppliers can rely that you’re serious about what you’re doing and you’re committed to giving the best products and services.
4. Retain Employment and Gain Recruits
A business won’t succeed if you do it alone. The truth is you need to hire employees no matter how small your business is. And when it comes to hiring employees, you need to secure their benefits, including health insurance. If you can provide comprehensive insurance, prospective employees will be attracted to apply for and retain their employment.
Types of Insurance for Small Businesses
1. General Liability Insurance
General liability insurance is the most vital coverage needed when establishing SME businesses. It covers essential factors, such as property damage and bodily injury. Usually, this is the main coverage for businesses who usually have clients coming over to their stores to buy products or avail of services.
2. Property Insurance
Property insurance doesn’t just cover the building or store, but also other equipment, inventory, and machines inside your business address. Meanwhile, even if you’re operating an online business, you still need to avail of property insurance for your office.
For instance, if your office has been affected by a natural disaster, you don’t need to halt your operation since property insurance can cover the repairs, and help you operate in a temporary place while repairs are being made.
3. Business Interruption Insurance
In case your business needs to stop operation, having business interruption insurance allows you to compensate for the finances of the income, rent, bills, and other operational expenses. Usually, this insurance covers for a few months to a year, depending on your insurance premiums. However, the higher your risks are, the higher your insurance premium should be.
4. Professional Liability Insurance
If your business offers services prone to errors, securing professional liability insurance is essential to keep you safe from legal claims against errors, negligence, and omissions.
5. Workers’ Compensation Insurance
As mentioned, one of the requirements and have-haves when looking for an essential business insurance policy is workers’ compensation insurance. It allows employees to file claims against injuries, accidents, and other illnesses caused by their job.
The specific job of the employees doesn’t matter. As long as they’re present in your office or store, you need to provide comprehensive insurance to help them cope in case of unexpected incidents.
6. Cyber Liability Insurance
Nowadays, most businesses, including SMEs heavily rely on technology. If your business also uses computers, gadgets, and online payments, securing cyber liability insurance is a must. As you know, cyberattacks, data breaches, and other cyber-related incidents can happen anywhere.
Even if you have the most expensive anti-virus, having a backup, like cyber liability insurance can help you survive legal fees and paying for damages against the affected customers.
7. Commercial Auto Insurance
Does your business operate vehicles for deliveries and other services? Then, you should include commercial auto insurance in your policy. This covers property damages, medical expenses, and legal costs in case of accidents, and other unexpected situations.
Final Thoughts
SME business insurance can significantly help your business thrive in case of unforeseen events. By taking into account its importance (such as risk mitigation, legal requirements, help gain credibility, and retaining employees), and knowing the various types of insurance, you can tailor your insurance policy based on your business needs and preferences.