Business Insurance Coverage Checklist: Everything You Must Know

Though running a business is exciting, it can also be a little risky. Imagine a scenario where a customer has a slip-and-fall accident in your store. Suppose your office/chamber gets burned down. And this is where business insurance plays a role. It prevents your business from losing large sums of money. However, most business owners are uncertain of what types of policies are necessary.

Don’t worry! This straightforward and simple-to-follow business insurance checklist will enable you to get the type of cover that suits your business requirements.

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🌟 Top 4 Reasons You Need Business Insurance

Having business insurance will provide you with a safety net. It protects you if something bad happens—a fire, theft, accident, or lawsuit. If you lack insurance, you could be paying for it all out of pocket.

Top 4 Reasons Why You Need Business Insurance:

Barrier💼 Protecting business property
💰 Cover losses or damages
⚖️ Protect yourself against jail time
🛡️ Establish Trust With Clients And Partners
📜 It’s often required by law

📝A Simple, Straightforward Business Insurance Coverage Checklist

Below is an overview of the key policies to have on your business insurance checklist. You may not need all of them, but knowing what each one does enables you to make the best choice.

✅ 1. General Liability Insurance

This is the most general form of insurance for any business owner.

Covers:

Injuries to Customers Rocking Up At Your Work
Property damage to others
Legal fees, in the event someone is suing you

For example, A customer is walking through your shop and slips on a wet floor, breaking their arm. It pays for their medical bills and legal fees.

Something every business is.

✅ 2. Property Insurance

You need this kind of insurance if you own a building, an office, or equipment.

Covers:

Fires
Theft
Vandalism
Storm damage

For Example, your office burns down and you lose your computers. Property insurance compensates for repairing or replacing these items.

✅ 3. Business interruption insurance

Also known as Income Loss Insurance, this helps if your corporation ceases to be working because of a problem (say, fire or flood).

Covers:

Lost income
Operational costs (such as rent, bills, wages)

For instance, A storm shuts you down for 2 weeks. It even pays for your ongoing expenses if you are not generating revenue.

✅ 4. Insurance for Workers’ Compensation

If you have employees, this may be a legal requirement based on your state.

Covers:

Employee injuries on the job
Medical bills
Lost wages
Lawsuits by injured employees

For example, an employee is injured lifting heavy boxes. This pays for their hospital bills and lost income.

✅ 5. Errors & Omissions Insurance (also called Professional Liability Insurance)

Called E & O Insurance as well.

Covers:

Mistakes in your service
Missed deadlines
Bad advice or work

Ideal for: Consultants, freelancers, designers, lawyers, doctors, or anyone who provides a service or advice.

For example, A lawsuit from a client because your design has cost them money. You will find the policy advances both your defense costs and settlement costs.

✅ 6. Commercial Auto Insurance

This coverage is also essential for businesses that own or operate vehicles.

Covers:

Business driving accidents
Property damage
Injuries to others
Repairs to your vehicle

Please note that business trips are not covered by personal car insurance.

✅ 7. Cyber Liability Insurance

Cyber attacks are a real threat in an age when so much business is conducted online.

Covers:

Data breaches
Hacking damage
Customer info leaks
Recovery costs

For example, a malicious hacker comes in and steals your customer emails and credit card info. This insurance also assists with the expenses of defending yourself and rebuilding your name.

✅ 8. Product Liability Insurance

This is for all the product makers and sellers out there.

Covers:

Safety-related damage or injury from your product
Legal claims from customers

For instance, A toy you sell breaks and injures a child. This is where the topic of product liability comes into play, and it comes in handy to help pay for the lawsuit.

✅ 9. Home-Based Business Insurance

Run your business from home? Your home insurance won’t cover it all

This insurance covers:

Business equipment at home
Dangers You Could Present to Clients on Your Property
Home-based operations

✅ 10. Umbrella Insurance

This is additional protection when you exhaust your other policy limits.

Who it works best for: High-risk of litigation or large claims businesses

💡 How to Select Coverage for Your Needs

Selecting appropriate insurance does not have to be difficult. Use these simple tips:

Know your business risks
That tea shop requires different coverage than a tech business would.
Follow state and local laws
Insurance, like workers’ comp, is even mandatory.
Talk to an insurance agent
And they can guide you to build the appropriate plan specific to you.
Bundle policies to save money

A BOP, or Business Owner’s Policy, combines multiple types of insurance offered under one policy by many companies.

💡 Business insurance covered activity perils FAQs

What type of insurance do small businesses need?❓

Any small business should start with general liability insurance.

❓ Is business insurance mandatory?

Others, such as workers’ comp and commercial auto insurance, are mandatory in some states.

❓ How much does business insurance cost?

Costs depend on:

Your industry
Size of your business
Location
Number of employees

Pro Tip: Most providers will have plans starting at around $30-$100 a month for small businesses.