Answers to Your Small Business Insurance Questions

Q: Why does my small business need insurance?

Pro Answer: At McClure Insurance, we enjoy working with small business owners and supporting them with insurance products and services that help them feel confident about their business’s future. At the same time, as your insurance professional, it’s our job to make sure that you are aware of potential pitfalls that could lie ahead and help you plan for these risks to minimize their impact on your operations.

The following are just a few stories of sudden and costly events that a small business like yours may have to face and are excellent examples of why you need a comprehensive insurance plan.

• Customer injury. At a retail store’s grand opening event, a shopper slips and falls on a wet floor and sues the owner for expenses related to their resulting injuries, including medical bills, missed time at work, and emotional distress
• Damage to a business owner’s property. An electrical malfunction, originating from a single fluorescent light fixture in the ceiling, sparks a fire that guts an entire mom-and-pop restaurant.
• Employee car accident. A contractor hires a few extra employees to help meet the demand for home improvement projects and provides them with company-owned pickup trucks. On the way to a job site, one of the new employees causes a multi-car crash, and several drivers and passengers require emergency medical care.
• Workplace injury. While checking inventory at a small plastics manufacturing facility, an employee falls off a ladder, and suffers broken bones and a concussion, and will be out of work for several weeks.

The financial implications for a small business owner when any of these events occurs can be overwhelming. A slip-and-fall third-party lawsuit, a catastrophic event that destroys critical business assets, a serious accident in one of your commercial vehicles—these can all cost you tens or hundreds of thousands of dollars in legal fees, repairs, medical expenses, and more. This is often too much of a strain on finances for a small company to bear, especially one that is just starting up.

Having the proper small business insurance in place is one of the best ways to safeguard your business from these and many other unpredictable events.

Q: What type of insurance does my small business need?

Pro Answer: Whether you’re selling merchandise, manufacturing a product, or offering a service, it is highly likely that you will need at least one, if not all, of the following basic small business insurance coverages.

• Commercial General Liability is designed to protect you from personal injury or property damage claims brought against you by a third party, like a customer, vendor, or delivery person. It also provides coverage in the event that a competitor sues you for libel, slander, copyright infringement, or stolen ideas. Should you be sued for any of these reasons, having a commercial general liability policy could save you from having to use company or personal funds to pay a defense lawyer, any court-ordered judgments and settlements, and other related costs.
• Commercial Property is coverage to protect you from the most common threats to your company’s building and belongings. An electrical fire, a gusty storm, a break-in and theft, or a computer virus are all events that can cause significant damage to your office space, retail store, or storage facility, as well the contents like furnishings, inventory, machinery, computers, and other critical business items. With commercial property coverage in place, your business will be financially prepared to restore what’s been damaged or purchase replacement items.
• Commercial Auto is essential protection for any small business that uses a car, truck, van, or other vehicle for business purposes. During the course of any given day, you or your employees may be bringing tools and equipment to a worksite, making product deliveries, running errands, or visiting customers. If you’re doing any of these activities in a car owned by your business or that you’ve rented in the business’s name, then you should have a commercial auto policy to protect you, your employees, and your vehicles. In the event of an accident, this insurance could help you pay for repairs to your damaged vehicles, regardless of who’s at fault. Commercial auto may also cover medical costs and lost wages for any injuries caused to others, as well as property damage to other people’s vehicles, whether you’re at fault or someone else who is driving your business-owned or rented vehicles. Finally, if someone decides to sue you for accident-related damages or injuries, then commercial auto typically will help you pay for associated legal fees.
• Workers’ Compensation, while last in this list, is certainly not the least important small business insurance coverage. In fact, workers’ comp is the only insurance that is required by the Commonwealth of Massachusetts, so it is not to be overlooked, even if your business is just starting to take off. The Bay State requires all employers carry workers’ compensation, no matter the number of employees you have or the hours they work. Plus, there is a great benefit for you to have workers’ comp coverage. If one of your employees suffers a workplace injury or illness, this insurance could cover the cost of their medical care and replace a portion of their lost wages if they are unable to work for a period of time. In a worst-case scenario, if a worker dies as a result of on-the-job injuries or illness, workers’ comp typically provides a death benefit to the employee’s family.

Regardless of a company’s size, setting, or specialty, these four basic coverages are important for all small business owners to understand and consider. They can provide you not only with critical protection for your investment but also peace of mind.

Q: What does small business insurance cost?

Pro Answer: The McClure team knows that managing cash flow is a real stressor for many small business owners and that new expenses are added very cautiously. For this reason, we want to highlight an economical way to get most of the small business insurance coverage that you need all in one package, called a businessowners policy or BOP. This package policy is an excellent cost-saving option, compared with purchasing each coverage you need separately. It also makes the insurance process much simpler, since you pay and manage one policy rather than multiple programs.

The typical BOP includes several of the basic small business insurance coverages we’ve discussed and can be enhanced with a range of endorsements, including:

At McClure Insurance, we would be glad to evaluate your eligibility for a businessowners policy. If you meet the requirements of this program, then we will work with our insurance company partners to put together the best BOP solution for your business today, as well as to make sure your policy can adapt to meet the needs of your venture as it expands. Finally, we can assist you in securing other important small business insurance solutions, at an affordable rate, that are not available in a BOP, such as commercial auto and workers’ compensation.