Small businesses may overlook their need for insurance or find they do not make enough money for all the types of insurance they need. There are certain aspects of your business that will be the most influential when selecting different types of insurance.

Online Vs. Physical Location 

Having a physical location is vastly different than doing business online. If you have a physical location, you will need to insurance that would protect the building and its contents, in addition to customers that visit. General liability insurance is essential for physical locations. This type of insurance protects your business if a person is injured or their property is damaged because of your business.

Commercial property insurance may be applicable for both physical and online businesses. This type of insurance also protects the building and its contents if they are damaged. For online businesses, you may want this type of insurance if you have a warehouse or similar location where you pack and ship orders. You may need additional insurance to cover specific types of disasters, such as floods or earthquakes.

Contractors Vs. Employees

Having employees, whether salaried or hourly, comes with a considerable price because you will need workers' compensation insurance. This is a form of insurance that is essential to legally operate a business. The insurance helps protect workers if any job-related injury or fatalities occur. If a person is injuries on the job, the insurance covers their medical care and any long-term needs, such as physical therapy and lost wages.

If a job-related incident is fatal, the insurance will help the family cover final expenses. Some business owners try to avoid the extra costs of workers' compensation insurance by relying on independent contractors. However, this might not be effective, because workers' compensation laws vary by state. Some localities may require your business to cover independent contractors just as much as employees.

Type of Product

The type of business you have and what type of product or service you provide will also influence the types of insurance you need. For example, a business that provides software or manages network security should have cyber insurance. This insurance is designed to protect customers if your company experiences a breach that exposes customer information. The coverage includes identity theft protection for affected customers.

Corporate auto insurance is another essential insurance for small businesses that require driving as part of their work. You will need separate insurance that covers company vehicles. Having insurance that covers the cost of a rental vehicle if a company vehicle is damaged can be important. Additionally, if your employees use their personal vehicles for work, such as delivering food. you will need additional insurance to cover their personal vehicles.

Small businesses often have varying needs for insurance depending on the specific features of the business. Making sure all aspects of your business are covered can prevent catastrophic financial impacts on your businesses in the event of a problem.

Learn more about business insurance.