If you own a small business, you probably spend your time considering how to market, whether to hire staff, what products and services you should offer, how to spruce up your social media presence and other tactical and strategic activities designed to propel your business forward. But often in the rush to obtain clients and perfect your offerings, it’s easy to overlook some of the key foundational aspects you need to keep your business healthy and safe, including finding the best small business insurance.
In fact, one study found that many small businesses are woefully underinsured. Only just over a quarter held a “business owner’s policy,” which is a bundle of general liability insurance and commercial property insurance, and far fewer had specialty insurances that can be crucial in many situations: For example, only 6% had business interruption insurance and only 2% had cyber insurance.
But being underinsured—whether it’s insufficient coverage or the wrong coverage—can be catastrophic for your business. Small business insurance is a vital business building block for a number of reasons; in some states, certain types of insurance are required, but even if it’s not mandatory, it’s important to have adequate insurance in order to protect your livelihood.
That’s because it gives you a layer of security that you will be covered financially if something should go wrong, from an accident to a natural disaster, to theft or a cybersecurity breach. A rule of thumb is that every small business should protect themselves against occurrences that they wouldn’t be able to pay for on their own, such as damage and lawsuits.
Now that you know why it’s important to have the best small business insurance, let’s dive into what you need to know to make sure you’re covered. Consider this your comprehensive guide to business insurance San Francisco.
The first thing you need to figure out is what sort of insurance you need, and for the best small business insurance, you should rely on a reputable business insurance broker who can act as an advisor…you need someone who will sit down with you and discuss your needs, then help you get the best small business insurance for your individual situation.
While some types of business insurance are just smart to have, others are required by your state or municipality. Of course, as mentioned, the best way to know what types of small business insurance you need are by consulting a trusted broker. If you want to get a head start on figuring out what you need, you can also search for your state and “business insurance” or your local area and “business insurance,” such as “Business Insurance SF.”
It’s easy to focus on getting insurance for the “tangible” parts of your business, such as your physical premises and equipment, but it’s also vital to consider how to protect yourself regarding the “intangibles,” such as cyber insurance and professional liability. Here are the basic best small business insurance types you should consider:
Business & General Liability: Nearly every business needs this basic business insurance, whether you provide a product or service. It is essential to protect your business and pay the costs in the event you, your employee or a third-party person, such as a supplier or customer, gets hurt on your premises, or if you suffer property damages. In addition, it can financially protect your company and you as the owner should there be a lawsuit or third-party claim. Remember, you never know what can happen, so it’s important to be prepared and covered.
Professional Liability: This is particularly important for someone who offers “advice,” which can be subjective and therefore can be deemed false, even if you believed you were acting in your client’s best interest. Professional liability insurance will protect you and your business from claims that they have been harmed or lost money because of a negligent act, error or omission by you or one of your company’s employees. In fact, it is sometimes called “errors and omissions” insurance for that reason. Professional services providers such as architects, attorneys, writers, graphic or web designers, software developers, engineers, accountants, project managers, real estate agents and publicists are just a few of the types of professionals who should consider this insurance.
Worker’s Compensation: This type of insurance is required in California by law, provided you have three or more employees, including minors and undocumented workers. (Note that you should talk to your insurer about the difference between W2 employees and any contractors or freelancers you work with.) Worker’s compensation covers illnesses and injuries that might occur on the job, providing weekly payments to compensate for lost wages, payment of medical bills and protection for you, as the owner, and your assets.
Business Interruption Insurance: Today’s business climate has everyone thinking about whether they are covered for unforeseen catastrophes. Business interruption insurance can be important in many situations when you need to temporarily close down business, by protecting business owners through providing monthly income.
Builder’s Risk Insurance: We work with many general contractors and subcontractors, and this specialty insurance protects structures that are currently being developed, renovated or constructed, along with the equipment used at the sites.
Commercial Auto Insurance: This is another type of insurance that might be required by your state if your company regularly uses vehicles in your course of work. The OSHA report, “Guidelines for Employers to Reduce Motor Vehicle Crashes” finds that the average on-the-job crash costs an employer $16,500, with that number growing to $74,000 in an incident that results in employee injury, ballooning to more than $500,000 for a crash that involves a fatality. As you can see, commercial auto insurance is a must if anyone in your company drives either personal or business vehicles during the course of their work.
Cyber Liability Insurance: We read all too often about data breaches where companies unwittingly expose their customers’ private financial information. That’s where this insurance will kick in—to cover the costs of dealing with the breach as well as lost sales caused by it. Any commercial business should consider getting this important policy.
While those are just a few of the most common types of small business insurance, there are many others available that might be applicable to your state or city, industry or specific products and services you manufacture or provide. Given the vast array of possibilities, it’s more important than ever to sit down with a trusted insurance advisor to make sure that you are adequately covered for the specific situations, risks or issues that you might face.
It’s hard for any owner to be certain what types of insurance you might need for your specific business. That’s why it’s important to talk to someone who is used to working with small business owners like yourself. They likely know the types of risks other small businesses in your industry typically face and can offer you their expert advice on how to protect yourself, your company, your employees and your family.
The more information you can give them—about the types of work you do, how many employees you have, your typical sales and your assets—the more accurate your estimate will be from the start.
It’s important to shop around to make sure you’re getting a good price, but remember that price isn’t everything. You want to make sure you’re feeling confident you’ll get the service you need, meaning someone who will answer the phone when you call and will help make sure that your claims go through smoothly.
While you might be able to find cheap business insurance online, consider what you’re giving up in terms of service. Working with an unknown, virtual company can make any claim process even more challenging and stressful since you probably won’t be able to talk to an actual person who can answer your questions and keep you apprised of your claim progress.
That’s why many small business owners choose to work with a local company that understands business insurance San Francisco. They appreciate the peace of mind that they’ll get the answers they need in a stressful situation.
It’s also wise to choose someone who will help you with an annual audit of your existing coverage, assessing whether your business has grown or you have expanded into new markets or services, which might influence your business insurance needs. A trusted partner will take the time to make sure you have sufficient business coverage as your small business evolves over time.
It’s impossible to provide a quote for small business insurance SF without doing a complete audit of your company. However, it’s important to consider the factors that can affect your premium for various types of insurance. These include:
All of these various factors will be considered and will indicate the types of insurances you might choose to bundle together and therefore what it will cost. Being prepared with concrete information when you sit down with a business insurance provider can help ensure that you get the amount of coverage that you need. Cost is always a factor, so make sure to ask your advisor about ways that you can lower your premiums, including a higher deductible or by taking certain precautions to make you a more appealing applicant.
However, always make sure you are clear on any risks that might be associated with lowering your deductible or amount of coverage. Your advisor will explain the pros and cons of all your choices so you can make the choice that’s best for you and your business.
Many small business owners believe that they are protected because they have formed an LLC, which is a corporate structure that separates the owner’s personal assets from his or her business assets. However, registering as an LLC doesn’t guarantee that you will be protected from the risks that can lead to financial losses. No matter what corporate structure you have, make sure to obtain adequate business insurance so that both your business and personal assets are protected, no matter what happens.
Business insurance provides the peace of mind that your business and finances will be protected. But if you do suffer a loss, you might be wondering how you recoup the funds that will either pay for damages or keep you afloat if you suffered monetary loss. That’s a key reason why you want to work with a trusted insurance professional who can help you file your claim and get your reimbursement as soon as possible.
If an incident happens that necessitates a claim, your first call should be to your advisor, who will walk you through the next steps. But in general, make sure that you document everything, including the damage, and create an inventory of what was lost or destroyed. You also might need to file a police report so don’t delay contacting the authorities, if your insurance advisor suggests it. Your insurance partner will also let you know how many bids for repairs you will need to obtain and likely give you advice on who to call.
Make sure that you keep your business insurance advisor in the loop throughout the process, allowing them to lead in certain circumstances where they have more background and experience.
At O’Kane and Tegay Insurance Brokers, we specialize in helping small business owners in San Francisco and the surrounding areas get the coverage they need to feel that their business is secure. We have been family-owned and family-run since 1946, so we have the experience you need, combined with a commitment to always learning and following the latest on new regulations and best practices.
Our staff is hand-selected for their customer-service orientation, meaning which you will always get a friendly voice who will patiently walk you through any questions you have. While you strive to be the best at what you do, likewise, we are experts on small business insurance SF. We are always here to meet with our clients and explain what they need to know in a user-friendly way, with an eye to sufficient coverage at an affordable price.