How to Get Business Insurance: Explained

From brick-and-mortar shop owners to online-based businesses, obtaining business insurance to help protect your operations from the unexpected is important. Given the variety of policy options and different insurance companies out there, you may wonder how to find the right business insurance policy for your unique business. If the process feels daunting, we help by breaking down the basics for you here.

Why Consider Business Insurance?

Do you need insurance to run a business? Depending on your business size and type, certain state and/or federal requirements may mandate that you secure certain insurance coverages for your business. Moreover, certain contractual obligations (e.g. customer agreements, loan requirements) may necessitate you obtain and maintain insurance for your business.

While business owners may seek to structure their business in a certain way to help protect personal assets, for example creating an LLC or corporation, business insurance helps protect the assets of the business.

What is business insurance for?

Business insurance can help protect businesses from certain losses and liabilities that may arise when running a business. It can be an important risk management tool, helping to navigate what could otherwise be a challenging situation. Depending on the type of coverage purchased, business insurance generally helps protect businesses from financial losses due to certain covered events, which may be unexpected. Depending on the business's unique needs and the coverages selected, business insurance can help cover claims resulting from:

• Property damage
• Professional errors
• Natural disasters
• Bodily injuries

Lawsuits and settlements can be costly. Unfortunately, some businesses may end up closing their doors if they are forced to pay for claims out of pocket, for example. Business insurance can help provide financial protection in such situations.

Determine What Types of Insurance You May Need

Some business insurance coverage types may be statutorily required. For instance, most states require employers to maintain workers' compensation insurance. Always be sure to check regulatory requirements when shopping for business insurance options. Next, consider your business’s level of risks.

Analyze Your Risks

Each business may have unique risks to consider. For example, if you practice law, you may have a higher chance of facing legal malpractice claims. Also, consider the types of accidents that may happen at your location. For instance, claims resulting from slip-and-fall accidents may be more common if you own a brick-and-mortar shop.

Choose Insurance Coverages Based on Your Business Needs

There are many different types of business insurance policies to consider. They each provide coverage for different types of claims and losses. Some of the most common types of business insurance include the following:

(Note the terms, conditions and exclusions of each policy will vary but the following provides a general description of what is typically covered)

Commercial General Liability Insurance

Commercial general liability insurance (CGL) is a common coverage choice for businesses of all sizes. A CGL policy generally covers third party bodily injury and property damage claims and may also cover claims related to slander and libel. CGL policies typically do not cover damages to the business’s own property or bodily injury suffered by the business owner or its employees. 

Commercial Property Insurance

Commercial property insurance is a type of insurance designed to help business owners protect the value of a covered building and its contents (such as furniture, equipment) and exterior fixtures features (such as fences) against covered losses. A commercial property insurance policy will typically cover such losses resulting from certain events including, for example, fires, windstorms and vandalism. A business owner can obtain a standalone commercial property insurance; however, commercial property insurance coverage may also be available under a Business Owner’s Policy, discussed below.

Business Owner's Policy (BOP)

Business owners may enjoy the convenience of a business owner’s policy, which typically combines commercial general liability insurance and commercial property insurance into one policy. Obtaining a BOP can help reduce costs and may simplify the buying process.

Workers’ Compensation Insurance

Workers' compensation insurance typically provides coverage for employees who are injured or become ill as a result of their employment, including medical expenses and lost wages. This type of coverage may be required by state law so it is important to understand the workers’ compensation laws in the state where the business resides.

Professional Liability Insurance

Businesses that provide professional services should consider professional liability insurance. Professional liability insurance typically covers claims alleging negligence and malpractice.

Cyber Insurance

Cyber insurance helps protect businesses against financial liability arising from data breaches, cyber attacks, and other cyber-related incidents. It typically covers expenses such as legal fees, notification costs, and customer compensation. Looking to go deeper with your risk management? Consider cybersecurity services in addition to cyber insurance.

Commercial Auto Insurance

Commercial auto insurance provides coverage for vehicles used for business purposes and may include, for example, collision, liability, comprehensive, personal injury, medical payments, and uninsured/underinsured motorist coverages.

Product Liability Insurance

Product liability insurance helps protect businesses from financial liability that may arise from claims alleging that defective products they manufactured or sold caused harm, injury or other damages to consumers. It typically covers expenses such as legal defense costs, settlements, and judgments.

How to Get Business Insurance

Know The Basic Steps: Purchasing business insurance involves a few basic steps. After analyzing your risks and identifying potential business insurance types which may work for your needs, you should research insurance companies or start working with a broker. You’ll need to provide details about your business in order to request quotes and then you'll be able to review coverage options. When you have identified policies that satisfy your specific needs, you can secure the coverage. 

Shop Around for Quotes: Before you choose an insurance company to issue the policy, shop around for quotes from different insurers. When comparing the quotes, try to avoid just comparing the costs, as less expensive options may provide less coverage. Instead, try to also compare coverages, limits, premiums, payment terms and the insurance company’s reputation. In many cases, you can request business insurance quotes online.

Try Using a Broker: Using the services of an insurance broker can be beneficial as a broker can represent your interests and needs. The broker will have a conversation with you about your business's needs before providing you with available coverage options. You may have access to a wider network of insurers when you work with a broker and you will have someone with real expertise working in your corner.

Purchase Your Policies: Once you narrow your available coverage options, you can make the decision to proceed with purchasing the policy or policies which meet your company's needs. Make sure you mark down when monthly payments are due as well as any renewal dates. You should reevaluate your coverage as your business changes and grows.

Help Protect Your Business with Acrisure

Now that you know the basics of how to get business insurance, you may be considering adding coverage. Request a business insurance quote online today or contact us to discuss other policy options that may be right for your business.