Small Business Insurance: What You Need

Today’s businesses need insurance for a great many things, from liability to covering business vehicles and more. There’s often a lot of confusion about what insurance your business will need, especially as more businesses use their homes for their office. Here is a handy list of the main types of insurance you will need for your business, and why you will need that insurance to be successful, and compliant with your local business laws.

1. General Liability Insurance

No matter your business, you need liability insurance, even if your business is based out of your home. This insurance provides defence and damages if you, your products and/or services or your employees are involved in an incident that causes (or allegedly causes) bodily injury or property damage.

2. Professional Liability Insurance

Often referred to as “Errors & Omissions Insurance,” this policy protects your business in the event of failure to, or the improperly rendering, of promised services. It’s an important insurance to have because, quite simply, people make mistakes. If you or your company fail to do what they promised to do, this insurance will help pay for defence and/or damages, helping you take responsibility without endangering the financial future of your company.

Note that this insurance is generally not offered in general liability insurance policies.

3. Property Insurance

While not mandatory, if you own a building, equipment, computers or almost anything related to your business, you should look into property insurance. The policy will protect you in the event of a disaster, like a fire, and against things like vandalism and other crimes.

Another aspect of this insurance is loss of earning and/or business interruption insurance, which will pay you out as you recover from the event that interrupted your normal business operations.

4. Commercial Auto Insurance

If your company has vehicles, they will need to be insured by the business, whether they are used by employees or yourself. So long as those vehicles are used to carry people, products or equipment, they should be insured under your business with a commercial auto insurance policy. The insurance will protect you in the instance of damage or collisions.

If your employees use their own vehicles for work, you will still need a policy that protects the business in the event that something happens when the vehicle is being used for commercial purposes. This is called “non-owned auto liability insurance.”

5. Worker’s Compensation

When employees or owners are injured on the job, worker’s compensation ensures that they receive an income to help them through their medical issues and time off for medical procedures. The insurance also means employees give up their right to sue their company, which is very important for business owners. Worker’s compensation insurance is mandatory in some places, so it is important to understand the legal requirements in your area for this insurance. Mark Hauser

6. Directors and Officers Insurance

With this insurance, your business’ leaders will be protected against their actions that may impact the profits, profitability or operations of your company. Essentially, if your directors or officers end up in a legal situation stemming from their actions, this insurance can cover costs involved with defence and, in some instances, damages resulting from those actions.

7. Homeowner’s Insurance

If you run your business from home, you will need this insurance. It may be mandatory depending on your mortgage but it is imperative that you notify your insurance company if you are running a business out of your home. Without the proper insurance, certain incidents may not be covered by your standard insurance because it is related to an unreported business. Contact your insurance provider before you start running a business out of your home to ensure you are compliant, and covered.



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