Small business insurance - understand your risks

You’ve made the big decision to start out on your own, your business plan is a hit with financial backers and you feel ready to go out and take the world by storm. This is exactly the time when you need to ask yourself: Have I thought about the threats to my new business? You wouldn't want your great idea to fail because you’d forgotten to consider how an everyday event might wind up costing your company dearly. The good news is that, for many of these risks, the solution is close at hand. Small business insurance won’t cost you much, but without it, your business could be forced  under by an unexpected problem.

Consider the following distressing scenarios:

• An unhappy customer claims you gave them poor advice and decides to sue you. Even if you aren’t at fault, you’re likely to find yourself spending a lot of time dealing with the case and racking up expensive attorneys’ bills that you hadn't bargained for in your business plan. By buying Errors and Omissions insurance (Professional liability insurance) you can cover your legal costs in the event of a lawsuit involving a covered claim. An insurance company will even appoint a lawyer to defend you in such a case.
• One of your employees is injured at work. He’s not badly hurt but he needs hospital treatment and rehabilitation, all of which you must pay for. The costs can quickly spiral, but you can get coverage for these expenses with Workers’ Compensation insurance.
• A potential client is injured while visiting your offices and you are held responsible for their injuries.  Do you have General Liability insurance to cover the damages and medical and legal fees?
• There’s a fire or tornado that destroys your office. The damage not only wipes out your office, but your income for the year.  If you had a Business Owners’ policy, you’d be reimbursed to replace your lost equipment.  Further, if your Business Owners’ insurance has Business Interruption coverage, you could also be reimbursed for that lost income, up to your policy’s coverage limits.

Some of these incidents may ring a bell for you. You’re a motivated entrepreneur with a great business idea, but these events could derail your business before it ever really gets going. With money in short supply, your investors – whether family members, a bank or a venture capital firm – will want to know you’ve got every angle covered to protect their investment as well. Sit down and think of all the possibilities, ideally before you’re preoccupied with the day-to-day running of your new firm. Or a quick call to us or visit to our website for a business insurance quote could give you the information you need to avoid lot of heartache in the long run. Eric Micheals Vice President, Underwriting Hiscox