For owners who have recently opened a small business, applying for commercial coverage can feel challenging with a dizzying array of products and coverage limits. Applying for auto or homeowners insurance is one thing — figuring out what types of insurance your business needs is another. But the truth is it’s not as daunting as you may think. With some careful examination and planning — a process your friendly Unland agent can help with — you can cover your new business’s risks and safeguard yourself from any potential harm in the future.
Where to Begin?
So, where do you start? Before enrolling, you should first understand where your business’s risks are and what types of coverage would address them best. According to the U.S. Chamber of Commerce, small business owners should follow these steps to ensure they’re securing the proper coverage for their organization.
- Review the laws. Determine which coverages your business is required to have — the non-negotiables. Federal and state laws may require you to have certain types of insurance, including unemployment, workers’ compensation, and disability insurance.
- Assess your risks. Carefully examine the costs associated with your property and inventory, as well as any costs that may arise from accidents or professional errors.
- Consider how much you can pay. When it comes to deductibles, don’t over-extend. Choose an amount your business can easily handle.
- Decide which types of insurance are most important and sort them based on your risk analysis. Remember: You can always add or remove policies as your needs change.
- Talk to an expert. Agents, brokers, and professional employer organizations can help make comparing coverages less confusing.
How Much?
Once you’ve selected the policies you’d like to enroll in, how do you know how much coverage to apply for? According to the U.S. Chamber of Commerce, “your insurance limits should align with your risk.” In other words, you should secure enough coverage to cover things you wouldn’t be able to pay out of pocket. Some popular choices for American small businesses include:
- General liability insurance: $1 million per occurrence and $2 million in aggregate limits. This also allows up to $1 million per claim and $2 million during the plan’s lifetime.
- Professional liability insurance: $1 million per occurrence and $1 million aggregate limit. This policy can vary between $250,000 and $2 million depending on the industry.
- Business owners’ policy: $1 million per occurrence and $2 million aggregate limit. $2 million per occurrence and $4 million aggregate limit is the second-most popular.
- Cyber liability insurance: Per occurrence and aggregate limits range from $1 million and $5 million, though these too can vary by industry and types of customer data handled.
The Unland team can help find the business insurance policy that best fits your organization. Learn more about our commercial options or call (309) 347-2177 for more information.