6 Things Small Businesses Almost Always Forget To Insure

Small businesses need to protect themselves from the unexpected. Here are some areas small businesses almost always forget to insure.

Given the stress of starting and running a business, it’s not surprising that small business owners often forget about some lesser-known types of insurance, or try to cut corners by foregoing the basics. Without the right insurance coverage, your business could lose a ton of money in an instant with nothing to back it up financially. Here are some areas small businesses almost always forget to insure.

1. Business Interruption Insurance: Because Disasters Wreck Your Bottom Line

Could your business survive a week or even a month of inactivity? Most can’t take that much lost revenue. Business interruption insurance protects you from losing money when your business cannot operate for a certain period of time.

If, for instance, your building was damaged, business interruption insurance would pay for areas including:

• Lost profits
• Expenses that you have to pay even though you’re not operating
• The cost of relocating temporarily
• Any extra expenses

2. Commercial Property Insurance: Because Quality Real Estate Is Hard To Find

Appearance is everything when it comes to business and advertising. For any business, it takes time to find the perfect office space. The commercial property is also probably the biggest expense for a small business. You should do everything you possibly can to protect your investment.

Commercial Property Insurance, similar to home insurance, will cover any unforeseen damage done to your space. Whether Mother Nature causes damage through a disastrous flood or an enraged employee takes it upon him or herself to remodel your lobby area, your property insurance will cover all the sustaining damages. There are a couple of different types of commercial property insurance, so be sure to talk things over with your insurance broker.

3. Fraud Insurance: Employer Should Exercise Caution In Hiring

What would you do if an employee defrauded your company for thousands or even millions of dollars? You could press charges and sue the employee to get the money back, of course, but lawsuits can take years of litigation.

Fraud insurance protects your business when a trusted employee uses his or her position to steal money by being misleading about a work-related injury. Or if an employee continues to work after receiving benefits from a claim. This type of insurance is generally referred to as “claimant fraud.” Improper claimant fraud can easily cost a small company millions, which in return can force trustworthy employees to pay higher insurance premiums. Since there’s not a sure way to know whether an employee could potentially commit fraud, employers should take precautions and look out for certain behaviors when a claim is filed, such as: combativeness, difficulty getting in touch with the employee about the claim, or inconsistencies in the employee’s account of the incident (for example, two versions of the same accident and no actual witnesses at the scene of the injury). In an office space filled with around thirty people, it’s a slim chance anything happens with zero witnesses.

4. Startup Insurance: Because Starting a New Business Can Be Scary

It takes a lot of courage to start a new business. According to some researchers, 90 percent of businesses fail within five years. If you’ve put your life savings into a failed business, you could emerge without anything to show for it.

Startup insurance protects you from this loss. You still face plenty of perils when you start a small business, but startup insurance lessens these risks. Entrepreneurs who have no knowledge of the insurance industry should take the extra time to find a seasoned insurance broker in your business industry to assist with purchasing the right coverage package. A great insurance package should include a few benefits that will not only benefit their employees but the employer as well. Such as a health reimbursement arrangement that potentially covers all of your employees’ medical bills and rolls over any unused funds at the end of the year.

As a business owner, you should view your company as your child. If you choose to make your company available to the public without any insurance, it’s similar to driving around town with your kid in a car without seatbelts. Without insurance, you make your company more vulnerable to failure.

5. Health Insurance: Because You Can’t Run A Company With The Flu

New business owners need to save money wherever they can. But that doesn’t mean you should gamble with your health. It’s important for small business owners to purchase health insurance for themselves (assuming they don’t get it through their spouses’ employers).

Since health insurance is 100 percent tax deductible, it doesn’t cost as much as you think. And it’s a smart move that could save your business and your life.

6. Special Event Liability Insurance: Because Company Picnics Can Be A Liability

Every business should have general liability insurance. That’s a given. If you plan to hold special events, though, you might need additional insurance to protect you.

The specifics vary according to the kind of event you host. Will you hold the event on company property? Do you plan to serve alcohol? What kind of activities will you have at the event?

These and other factors will play a role in the kind of special event liability insurance that you need. It isn’t as simple as, say, filling out a homeowners insurance quotes page, so you may want to talk to your insurance agent personally.

Small businesses need to protect themselves from the unexpected, and the world is full of unexpected events. What other types of insurance policies should small businesses purchase? Does your industry require you to carry specific types of insurance not mentioned here?

This article was written by Kristina Jackson from Business2Community and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

Santander Bank does not provide business, tax or legal advice and the information contained in this article does not constitute business, tax or legal advice. Santander Bank does not make any claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in this article. Readers should consult their own attorneys or other tax advisors regarding any financial or tax strategies mentioned in this article. These materials are for informational purposes only and do not necessarily reflect the views or endorsement of Santander Bank.

This article is intended for informational purposes only. Readers should consult their own financial advisers, attorneys or other tax advisors regarding any financial or tax strategies mentioned in this article.

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