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Courtesy of Jen Glantz
I've been a solopreneur for almost a decade.
During that time, I've made a lot of financial mistakes. I made a mess of my bookkeeping when I attempted to do it myself. I spent too much capital on services, like hiring an expensive website designer, when I didn't have the money. I invested too much in the manufacturing of products before I knew if an audience would buy them.
A big goal of mine this year was to cut out more money blunders and streamline my business finances. To help future-proof emergency spending, I realized I might need insurance coverage.
Matthew Richards, an insurance expert and underwriting officer with Travelers Insurance, told me small business owners need insurance to protect their investment from the financial impact of unexpected events, such as an employee injury, a lawsuit, a natural disaster or a man-made event like fire, theft of property or automobile accident.
I asked him what policies I need so I'm not at risk of losing thousands of dollars in the future or having to tap into my personal bank accounts to pay for future errors.
A business owners policy that combines coverage
The first type of insurance Richards recommended I get is called a business owner's policy (BOP), which combines two types of coverages to protect your small business against a variety of claims.
First is general liability coverage, which safeguards your business in the event someone makes a claim against you or your business.
"General liability insurance provides protection from liability lawsuits resulting from things like a customer slipping on a wet floor, a defective product causing damage to a client's property, or claims that the products or services you provided caused injury," he said.
It was surprising to me that this type of coverage also can protect you from libel, slander, and certain legal claims related to advertising.
BOP also includes property coverage, which helps protect business property you own, lease or rent, including your buildings, equipment, furniture, and inventory.
"It helps cover repair or replacement costs of stolen, damaged or destroyed property, including property that isn't yours but was in your care," he said.
An added bonus of this coverage is that it also covers loss of income and covered expenses like rent, payroll, and other financial responsibilities while your property is being repaired or replaced after a fire or other covered loss.
Find the Best Business Insurance for You Meet Simply Business. Provide a little bit of information about your business and let Simply Business do legwork. You choose the policy that's right for you. Online or on the phone. Get a quote today.
Cyber liability to protect from unexpected attacks
When I shared with Richards that I run my business primarily online, selling products and services through my website, he recommended I get cyber liability insurance.
"This type of coverage protects your business against the costs of data breaches and other cyber security issues," he said.
For example, Richards explained that if a cyber attack happens that causes your business to lose income or you need to spend money on crisis management expenses (whether that's legal fees or costs associated with notifying customers), you would be covered under this type of policy.
Workers' compensation to cover employee injuries
In the near future, I plan to hire full-time employees. When I told Richards that, he said I'll need to get workers' compensation coverage.
"In the event that a work-related injury or illness should occur, workers' compensation coverage helps provide protection for you and your employees," he said. "For the injured employee, it helps provide important benefits like coverage for medical care costs and compensation for lost work time."
Even though this is an added expense, it's mandatory in the state I live in (New York) to have workers' compensation coverage for all employees, including part-time and family members employed.
Factors for pricing of this type of coverage are determined by a few factors, including payroll, industry, and type of work.
Find the Best Business Insurance for You Meet Simply Business. Provide a little bit of information about your business and let Simply Business do legwork. You choose the policy that's right for you. Online or on the phone. Get a quote today.