Do Small Businesses Really Need Insurance? Here’s Why the Answer is an Emphatic ‘Yes!’ 

You understand and generally appreciate the concept of coverage. Chances are good that in your personal life, you have life, auto, and renters or homeowners coverage, and maybe other lines as well. 

But you’re not so committed to the idea of business insurance for small companies like yours. Isn’t it just as important to financially protect your company as it is to cover your home, your car, and even your life? In truth, there are multiple reasons why you need business insurance, depending on the type of company you run. 

The Importance of Small Business Insurance 

Why do I need business insurance? 

You might have doubts because you think of business insurance as covering a fleet of vehicles — and you don’t have anything for a commercial auto insurance policy to cover. Or protecting against injuries or lawsuits from employees — and you’re working solo. Or that it protects against product defects — and you don’t make or sell any physical products. 

The point is that it’s easy to reject company protection if you think it’s something that’s not applicable to your line of work and the way you operate. But the truth is that this type of policy covers a lot of different lines of coverage and ways of protecting businesses of all sizes and categories. 

Almost no company needs every form of business insurance, but it’s likely that one or more lines of coverage are perfectly applicable to your company — and could save its very survival if various calamities occur. Still wondering what insurance does a small business need? Keep reading to explore the most essential coverage options. 

Types of Insurance Your Small Business Should Consider 

What insurance do I need for my business? 

Certainly not every form of business insurance that’s out there. But start by reviewing a few of the more common forms that offer benefits to most companies of all sizes. 

General Liability Insurance 

Also known as commercial general liability, or CGL, this form of small business liability coverage pays medical and legal bills when your company is found responsible for actions you or an employee took. 

This could take various forms, depending on the kind of business you operate. It might be injuries or property damage caused by your negligent delivery driver. If you have a retail company, it can pay claims for a lawsuit if a patron slips and falls on grease on the floor or a patch of ice on the pavement out front. It might cover legal action for copyright infringement if your firm is an information service. 

In other words, general liability coverage can be shaped to fit your industry and way of doing business and offer you protection against charges that could otherwise put you out of business. 

Property Insurance 

Do you run your operation out of an office building, a warehouse, or a factory? What’s inside that building? Do you have expensive office automation, manufacturing equipment and tools, or thousands of dollars in physical inventory? 

If you have any of this, it might be subject to theft, vandalism, fire, harsh weather, or other destructive events. And what comes after such an event? Your company is crippled, and you have no way to continue running it until your building is rebuilt or new inventory is bought and delivered. 

Your commercial property policy will offer financial protection against most causes of damage or destruction to your physical property, including buildings and their contents. Furthermore, your coverage will help you keep your business running while your operation is recovering from the event. 

Workers Compensation Insurance 

Depending on where you live, workers comp probably isn’t optional if you have employees. Most states make this coverage mandatory. It offers financial benefits to workers who are injured or made ill while on the job or to their survivors if an employee dies on the job. 

Workers comp covers medical care and rehabilitation, and lost wages as a result of a workplace accident. Every U.S. state but Texas requires such coverage if you have even one employee (but not if you work alone). 

Professional Liability Insurance 

I don’t have factories, inventory, or my own office building. Does my small business need insurance? 

You might be a self-employed lawyer, accountant, engineer, writer, photographer, or other professional. You operate out of your house, apartment, or leased office space, and you have no inventory, very little expensive gear or equipment, and no fleet, machinery, or employees. 

So you don’t need coverage for your company. Right? 

Not so fast. Just because you don’t need to cover a fleet, property, or inventory doesn’t mean your company isn’t vulnerable. 

Professional liability policies cover entrepreneurs who offer professional services against legal damages for various reasons. You might be sued for providing faulty advice, missing deadlines, breaching contract terms, taking actions that result in claims of libel or slander, and for countless other reasons. 

Your professional liability coverage will help pay for your legal costs and for fines, fees, and damages awarded to claimants if you lose your case. This is another situation in which one honest mistake — or even a baseless accusation of fault — could wipe out your company if you don’t have such very affordable coverage. 

Financial and Legal Benefits of Business Insurance 

Think about the various forms of coverage you have in your personal life — and the financial disasters that could occur if you didn’t have them. Imagine a fire costing hundreds of thousands of dollars in damages to your home — and you had to come up with that full amount out of your own pocket. 

Or you’re driving at night in stormy weather, and you hit another vehicle. Your car is totaled, the other vehicle is heavily damaged, and the other driver suffers injuries and is bringing a lawsuit — and you have no auto policy in place. 

Or you have no life insurance, and you leave your loved ones in a dire financial situation. 

Business insurance is as indispensable to your company as those other lines of coverage are to your personal life. While a house fire could wipe out your savings and any hope of rebuilding your home without coverage, a fire, tornado, or burglar could do the same to your company. Lawsuits can cost your business thousands of dollars to defend — even if you ultimately win. 

It’s easy and highly affordable to protect your company from whatever threats to its survival it might face. 

How to Choose the Right Policy for Your Business 

As noted above, most businesses don’t need every form of business insurance on the menu. Not every coverage will be applicable to your line of work or how you operate your company. But some forms of coverage might be crucial. 

Don’t try to figure it out on your own. Have a long chat with an insurance broker. A knowledgeable and helpful agent will ask you a lot of questions and comprehensively answer several of your own. 

They’ll want a thorough understanding of your company and how it operates, at which point they can help you determine your coverage needs. An independent business insurance agent is one who doesn’t work for a single insurance carrier. Instead, they’ve established contractual relationships with several leading brands, so they can go shopping on your behalf for the policy that best fits your company’s needs, at the most competitive cost. 

Protect Your Passion — Insure Your Small Business with Confidence 

What small business insurance do I need? 

Schedule a chat with a highly knowledgeable independent agent to get that answer. At Acceptance Insurance, we have lines of coverage to fit every category of business and every business need. 

Start the conversation by calling us at (877) 405-7102. Or get a quick quote online. You can also find an Acceptance Insurance office near you. 

However you reach us, we’ll show you how to protect your business — and your life’s passion — at the lowest possible cost.