Small business owners have a lot of questions about insurance

Small business owners have a lot of questions about insurance

Business insurance helps to protect business owners from some of the unexpected costs of running a business.  Without the right insurance coverage, natural disasters, accidents, and lawsuits can effectively put you out of business.

Having the right coverage as well as the right amount of coverage can help to ensure that both your business and personal assets are fully protected from unexpected catastrophes.  And, in some cases, you may be legally required by the federal or your state government to purchase certain kinds of business insurance. 

For small businesses owners who employ workers, state law and/or federal law requires that they purchase workers compensation. Some states require small businesses that employ workers to purchase disability insurance; California is one of those states. 

Small businesses that employ workers are required by law to pay taxes related to unemployment insurance. Generally speaking, employers are required to pay both federal and state unemployment insurance if:

  • The wages that they pay their workers total $1500 or greater in any given quarter of a year
  • They employed at least a single worker during any day in a week in twenty weeks in a year, regardless if these weeks are consecutive.

In some states, the unemployment insurance law may differ from that of the federal government. 

But, what about non-mandatory types of insurance for small businesses?  Which types of coverage are considered to be necessary and which are recommended?  If you have questions about insurance for small businesses, the following are some small business FAQs.

Frequently asked questions about small business insurance

Do You Need Small Business Insurance?

Business insurance offers critical protection for your small business, for example, if you’re sued for selling or manufacturing a defective product, or if an employee is injured while on the job. The costs of medical bills, property damage, and/or possible litigation can be high and could take a real toll on your assets.

Most businesses purchase general liability insurance which provides protection against customer injuries and other commonly occurring accidents. However, depending on the type of business you’re in, you may need additional policies.

How Much Does Small Business Insurance Cost?

The cost of insurance for a small business is based upon the number and types of policies that you purchase as well as your coverage limits. Other factors that come into play include the number of people you employ, revenue, location, and type of business. 

How Can You Get Your Small Business Insured?

The first thing to do is assess your risks and how they could damage your business. Shop around because prices and benefits can vary greatly. You’ll want to compare rates, terms, and benefits of insurance policies offered by different companies.

More questions?  We have more answers

While owning a business has its advantages, it also comes with risks. Having the right insurance coverage for your business can help to mitigate those risks. Daniel Fraisse, insurance broker for small businesses in Los Angeles, can answer your questions about insurance for a business and will work for you to find the best coverage for the most affordable rates.

Call today to get your free quote.