Shopping for small business insurance can feel overwhelming with so many options out there. Where do you even start? Don't worry, we're here to put you through it.
In this article, we have explained the major types of coverage, help determine how much you need, and provide some recommendations for reputable providers that specialize in small business plans.
By the end of this, you'll feel confident you have coverage tailored to your unique needs so you can get back to focusing on your business.
Types of Coverage For Your Small Business Insurance Needs
As a small business owner, you need to make sure your company and its assets are properly insured. The types of coverage you need fall into three main categories:
1. Property insurance
protects the physical assets of your business like equipment,inventory, and buildings. It covers damage from events like fire, theft, or natural disasters. The amount of coverage you need depends on the value of your business assets.
2. General liability insurance
protects your business from lawsuits due to injuries, accidents, or negligence. It covers costs like legal fees, hospital bills, and settlement payouts. Liability insurance is important for any small business, especially if customers visit your premises.
3. Business interruption insurance
provides coverage if a disaster or event forces your business to temporarily close, resulting in lost income and operating expenses. It can help pay for costs like rent, utilities, and payroll during the interruption so you can stay afloat until you reopen.
Other useful policies include:
Professional liability insurance if you provide a service.
Cyber liability insurance to protect customer data and cover costs from a data breach.
Commercial auto insurance for vehicles used for business purposes.
Key person insurance to protect from financial loss if an important employee dies or becomes disabled.
Ways to Compare Small Business Insurance Policies
Consider the following factors when evaluating small business insurance options:
1. Coverage and limits
The amount of coverage and limits can vary significantly between policies. Make sure any policy you’re considering provides enough coverage for your business assets and any potential liabilities. Higher coverage limits mean higher premiums, so find the right balance of coverage for your needs.
2. Pricing and discounts
Premiums, deductibles, and discounts can differ greatly between providers. Shop around at different companies to compare quotes and find the most affordable option for the coverage you need. You may be eligible for discounts if you’ve been in business for a while, have a good business credit score, or bundle multiple policies together.
3. Additional riders
Look at what optional add-on riders each policy offers, like business interruption insurance, data breach coverage, or commercial auto insurance. Extra riders will increase your premium but can provide protection for risks not covered in a standard policy. Purchase any riders you need to adequately insure your business.
4. Provider reputation and customer service
Consider each company’s financial stability, customer satisfaction ratings, and ease of filing a claim. Look for an insurance provider with a solid reputation for paying out claims in a timely manner and providing helpful customer support. The level of service you receive can make a big difference if you ever need to file a claim.
READ ALSO: The Importance of Cyber Insurance
How to Choose The Right USAA Small Business Insurance For You
USAA offers several small business insurance options to consider:
1. General Liability Insurance
This covers expenses related to injuries, property damage, and lawsuits. For many small businesses, general liability is a must. USAA’s policies start at $500,000 per occurrence and $1 million in aggregate. Higher limits are also available if needed for your industry.
2. Commercial Property Insurance
This protects your business property like buildings, equipment, and inventory in the event of events like fire, theft, or natural disasters. USAA offers building, equipment and inventory coverage. Consider how much it would cost to replace critical assets if damaged or destroyed.
3. Business Owner’s Policy (BOP)
A BOP bundles general liability and commercial property insurance, along with business interruption coverage. This “all-in-one” solution can save you money compared to purchasing separate policies. USAA's BOPs provide $500,000 to $10 million in coverage limits.
4. Professional Liability Insurance
Also known as errors and omissions (E&O) insurance, this protects against lawsuits from clients or customers over alleged mistakes or negligence. For service-based businesses like consultants, attorneys or healthcare providers, E&O insurance is essential. USAA offers E&O policies for many professions with coverage limits starting at $500,000 per incident.
5. Cyber Liability Insurance
This coverage protects against expenses related to data breaches, hacking incidents or other cybercrimes. As businesses become more connected, cyber liability insurance is increasingly important. USAA offers standalone cyber liability policies with coverage limits starting at $50,000. Higher limits are also available.
Conclusion
The specific policy or policies you need depends on your business and risk factors. Connecting with a USAA business insurance agent is the best way to determine what coverage is right for your unique situation.
