Businesses need commercial insurance because it helps cover the costs associated with property damage and liability claims. Without commercial insurance, business owners may have to pay out of pocket for costly damages and lawsuits against their company. E&O protects the company if you or an employee makes a mistake or a mistake in providing advice or services in the course of business activity. If you answered “yes” to any of these questions, business insurance will help you minimize your risks.
In some high-risk industries, such as agriculture, construction, and manufacturing, LLC small business insurance may be a mandatory purchase. In addition, if employees drive their own cars in the company's business, a “liability policy for cars they don't own” protects your company if your employee doesn't have insurance or has inadequate coverage. If you store data, such as personally identifiable information or customer (or employee) payment details electronically, you should consider cyber liability insurance for your company. However, a business entity won't help your company survive a fire, flood, data theft, or personal injury lawsuit.
A data breach can be extremely costly for a small business because of both business disruption and regulatory requirements. Educating and helping buyers about financial products has been Maxime Rieman's goal, which led her to join CoverWallet, a startup dedicated to simplifying insurance for small businesses. BOPs are a great starting point, but they're not the only type of commercial insurance your LLC may need. If you rent the space your business operates from, your landlord's insurance policy may not cover you.
As long as you have the basic insurance needs to cover most aspects of what may happen, you must be sure that your business is secure. If you've formed a corporation, limited liability company, or other business entity, you may not realize that you still need insurance. If you need coverage both for the property and to protect yourself against third-party claims, you can reduce the cost and complexity of your insurance by purchasing a business owners policy or BOP. Taking advantage of insurance benefits can help ensure that both you and your business are financially protected.
Below, we take a closer look at why your LLC might need commercial insurance (regardless of size), along with the most common types of coverage. Many small business owners mistakenly believe that general liability insurance covers incidents that would actually be considered E&O claims.
