If you’re starting a small business, you’re likely frazzled from working long hours bringing your idea into the world. But don’t let your full workload delay you in protecting your fledgling enterprise.
Getting business insurance is necessary well before you open for business and prior to buying equipment and inventory, whether your company is based inside or outside the home, says Al Ancheta, an independent agent who specializes in business insurance for Pinnacle Insurance of Minnesota. “You’ve got to get covered as soon as you can,” he says.
Reasons to Get Business Insurance
Here are five reasons you should get commercial insurance before you get your new business up and running:
1. Avoid rushing to get covered.
Every business is unique, which means insurance needs vary. The owner of a small home-based business with little equipment may need only general liability insurance, while an entrepreneur opening a retail shop or a service business would likely need a business owner’s policy that combines business liability and business property insurance in one package. It’s also important to consider other variables, such as whether you plan to hire employees or use commercial vehicles. Waiting until the last minute to shop for coverage can mean scrambling to find the right policy and to set it up in time. “A lot of people call when they’re opening their doors, and they need coverage yesterday,” Ancheta says.
2. Gain peace of mind.
Putting off obtaining coverage can take your focus off starting and growing your small business. For example, Brandi Greygor, a clothing boutique owner in Union, Kentucky, says that she put off buying business insurance for nine months. The whole time, she fretted that her $10,000 inventory could get stolen or that she could get sued by a customer. Getting insured lifted that worry.
3. Be qualified to rent space.
If you plan to rent commercial space for your business, your landlord will likely require you to show proof of liability insurance. If you don’t have the right coverage in place when you seek space, that perfect storefront or office you’ve got your eye on could go to another business while you hurry to get insured. Landlords want to make sure they’re protected too, Ancheta explains. “If you have a space heater, and it catches fire, the landlord is going to come after you for the damage,” he says, adding that liability insurance will cover you in that scenario.
4. Protect your assets.
You’ll likely purchase equipment for your business, even if it’s just basics like a laptop , a copy machine, phones and office furniture. Protect your investment and the tools that help your business run by making sure you have property damage coverage. Some business owners who start out working from home mistakenly assume their home insurance would cover a loss, but business equipment coverage is typically limited to a few thousand dollars. Secure coverage before you start buying equipment and inventory, which could get destroyed in an instant before your first sale. “A fire could come through and ruin all your stuff,” Ancheta says.
5. Look out for liability.
As the owner of a startup, you’ll meet with potential collaborators or mentors, maybe take deliveries at your new office and welcome your first customers. All of these activities expose you to liability. For example, the delivery driver dropping off “Congratulations on Your Grand Opening” flowers could trip on your walkway. So make sure you have business liability coverage in place before you start operating.
6. Plan for the unexpected.
Your business could get temporarily derailed at any time. If you own a brick-and-mortar store and a disaster forces you to close temporarily, the business income insurance included in your business owner’s policy may help cover your rent and other expenses until you can open again. An interruption in income doesn’t stop the bills from coming. For example, a tornado that recently ripped through Louisiana forced sections of the city to close. If you found yourself in a similar situation, you’d need to pay your landlord and your employees even as repairs were being made to the building and utilities services restored to the area.
For all these reasons, it’s important for an entrepreneur to get insurance early in the process of embarking on a new venture. Once you’re covered, you can get down to business.
Hello,
I am looking for disability insurance. I have a one-truck operation, no trailer. In the event that I can’t work do to an non-work injury. I hope you can assist or direct me in the direction to go.
Thanks
Hi Denise,
For more information about our voluntary employee benefits insurance check out this link: https://www.thehartford.com/employee-benefits/voluntary
You can also find our contact information there if you have any other questions.
Thank you!