Business insurance 101: Everything you need to know

Running a small business is a bit like walking a tightrope – it’s thrilling, but it comes with some risk. It can be hard to know which risks to take and which to avoid. And what about the ones you can’t see coming? This is why business owners need insurance – to help them reduce risk so their business can thrive.

Why do you need business insurance?

Claims and lawsuits are expensive, and you can be sued even if you haven’t made a mistake. Small business liability insurance, including commercial liability insurance, can protect you and everything you’ve worked for.

If someone slips and falls in your place of business, or if an unhappy customer sues you, you could be looking at a potentially devastating lawsuit. 

What you need to know about business insurance

To help small business owners understand the nuts and bolts of business insurance, we created the Business Insurance 101 guide. However, we’ve also broken down some of the contents here so you can get a taste of what you need to know about business insurance. 

Types of business insurance

There are three major types of business insurance: general liability, professional liability, and BOP (business owners policy). You should have a basic knowledge of all three to help you determine with one(s) is right for your unique business. 

Depending on your specific situation, you may want to consider other types of business insurance as well. For example, if you have employees, you need workers compensation insurance. If you handle sensitive data, you may want to look into cyber security insurance. 

If you’re not sure what you need, you can answer a few questions on our website to find out. 

How to apply for business insurance

Applying for business insurance is relatively quick and easy when working with Hiscox, but there are certain requirements that all carriers will ask you to provide. To be ready, you’ll need the location of your business, the date it began, the number of employees you have, and other information about your business. (Checklist included in guide.)

Policy documents

Again, no need to go get a degree in insurance, but if you’re a business owner looking for insurance, a basic understanding of business insurance policy documents, like a waiver of subrogation and a certificate of insurance will come in handy. You can find the definition of some insurance terms here. 

How to file a claim 

It’s something all parties try to avoid, but if a situation arises where you need to file a claim, having some background knowledge will be helpful. Our claims process is pretty smooth, and that’s largely in part to our clear guidelines made available to customers. The number one thing to know is that you should start the claims process as soon as an incident occurs. 

Once you determine the type of insurance your business needs, you’ll be ready to get a quote, which will give you an idea of how much you can expect to pay each month. Start a quote here.

Bonus: Small business stories

Looking for business advice from inspiring entrepreneurs? Check out the Hiscox Side Hustle to Small Business Podcast, watch customer videos, and read the 2019 Side Hustle to Small Business Study™.