A checklist of the most important concerns
Entrepreneurship can be a burden to bear. Imagination, initiative, dedication and drive are all required before a business even begins. Once you’re out of the gate, it’s you against the competition; but operating your own small business could also mean you against a lawsuit. No matter how small your business may be, the smart move is to continue the big thinking that got you started in business in the first place. Your goal is to grow, and the bigger you get the more chance you have of running into trouble.
It’s not uncommon for a small business to be bigger than they think they are (and run into trouble because of it). This recently updated resource from the Small Business Administration will help you ascertain the size of your operation. Bear in mind too that even Sole Proprietor models who have no other employees will benefit from this blog.
Here is our list of coverage types that every small business should consider in order to protect themselves.
The essentials
Every Florida business of a minimum size is required to have worker’s compensation, disability and unemployment insurance. These are federal requirements and not optional. Beyond these bedrock policies, there are other perennial protections.
General liability insurance
The importance of general liability insurance can’t be overstated. In fact, many potential customers and clients might refuse to deal with you unless you have this in place. GL is designed to look after you in the event of causing harm to a third party, and can protect against a host of risks ranging from property damage, injury, and medical expenses to lost profits and the settlement of legal expenses. With GL protecting your business, you’ll not only have some key bases covered, you’ll also be sending a signal to clients that you treat your business with responsibility and foresight.
Professional liability insurance
If you’re practicing any form of medicine in Florida then you’re required by law to have professional liability insurance in place. Professional liability coverage offers protection in the event of you not providing the desired service to your customers through fault of error, negligence, or malpractice. The greater the potential harm of you failing to perform (such as physical or mental care services or the provision of financial advice), the more vital it is to have PL protection. Here are some other business models who should seriously consider it.
Property insurance
It’s important to remember here that, even if your small business is operated from home, you may still have to take out property insurance to protect what is not only your living space but also your business’ base of operations. PI will protect your furniture, assets, fixtures and equipment where your existing home insurance policy may not. If in doubt, it’s always safer to check with your provider. If your business premises exist apart from your home, then commercial PI is a must.
Product liability insurance
Defective products can be accidents waiting to happen. Product liability coverage protects you in the event of any harm or injury caused by something your business produces. Unclear or ineffective safety warnings/instructions, manufacturing or production flaws, and design defects can all lead to hugely expensive claims.
Is your small business a distributor rather than a manufacturer? If so, you can still be sued for the negligence and harm related to the producer of the product you distribute. You played your part in delivering it to the customer and so you can also be held liable.
There is also the case of strict liability. Under such a suit, a plaintiff can sue even in the absence of negligence on the part of the producer/supplier. Strict liability is explained in greater detail here and should be well understood as a real risk to your business.
Product liability insurance is sometimes a part of your general liability coverage but it’s always wise not to assume this is the case.
Business owner’s policy
This particular coverage is well worth the while. As a comprehensive policy package, it can typically include vehicle (business vehicles used to carry employees, equipment or products), crime (robbery, embezzlement and other crimes committed against your business), business interruption (financial recompense for actual loss sustained, loss of income and restorative costs), liability and property insurance coverage. The inclusive nature of a business owner’s policy often makes it the more attractive option for a small business.
More help with your insurance responsibilities
This further resource from the Small Business Administration offers some information and activities in understanding risk management. Here is another very helpful summary which gives more information on the diverse insurance concerns facing many kinds of small business.
The best course of action is always to speak to a qualified insurance professional who can pay close attention to your situation and recommend the safest insurance package to protect you and your business.
Avante Insurance is a South Florida family owned and operated insurance agency serving an array of insurance services to meet customer’s individual needs. If you’d like to know more about staying safe with insurance, you can call us at 305-648-7070, request an insurance quote or contact us with any questions or comments.