Insurance Fundamentals for Small Businesses

Small businesses have a lot to review heading into a new year. From finding new clients to looking at how to save money moving forward to fixing some of their shortcomings from the prior year or quarter, there’s a new game plan that needs to be set for 2020.

One thing that needs to be reviewed or added on is a business owners insurance policy. Insurers usually combine a number of insurance coverages into a single package that is one single contract, the business owners policy (BOP). This program mixes together coverage for all major property and liability insurance-related risks as well as additional coverages suitable for small businesses.

But small businesses should be aware of other types of coverages that can help protect their business, their assets, and their futures. Here’s a look at some of the insurance basics for small businesses heading into 2020.

Property Insurance

This kind of coverage compensates a business if the property used in the business is somehow lost or damaged as the result of common perils, namely fire, flood, or theft. Property insurance protects the building or structure as well as personal property held inside. Office furnishings, raw materials, machinery, computers, and more can be considered personal property and are vital to operations. Property insurance may also include coverage for equipment breakdown, debris removal, water damage, and other losses.

Liability Insurance

Any company, no matter the size, can be sued. Customers may file a claim that the business caused them some sort of harm. It could be a defective product or an error in a service provided–whatever it is, a claim of any size can hurt a small business who may not have the funds to pay out settlements or even legal representation. Liability insurance pays damages for which the business is found to be liable, up to certain policy limits. This coverage also pays for legal fees and medical bills for anyone injured.

Workers’ Compensation

An employer must have workers’ compensation insurance when there is more than a particular number of employees working. Workers comp insurance pays for medical care and replaces a portion of lost wages for an employee who is injured as a result of their job’s tasks. When a worker dies as a result of injuries sustained while working, the insurance provides compensation to their family.

Errors and Omissions

Some businesses include services such as making recommendations or giving out advice. Errors and omissions covers these situations and more. A policy will pay any judgment for which the insured is liable for, up to a policy limit. It also provides defense costs even if there is no wrongdoing accounted for.

Directors and Officers Liability

This kind of coverage protects directors and officers of corporations or non-profit companies if there is a lawsuit out against it claiming they managed the business or company without the right level of regard for the rights of others.

About American Team Managers Insurance Services

Founded in 1998 by Chris C. Michaels, American Team Managers Insurance Services (ATM) has provided wholesale and MGA services to more than 5,000 independent insurance agents throughout the United States. Our goal is to establish close, long-term relationships with our agency partners and insurance carriers and provide competitive products for the Exclusive and Non-Exclusive markets that we serve. For more information on our products and services, give us a call at (877) 671-7503 to speak to a representative.