Small Business Insurance Basics

There are 33.2 million small businesses in the U.S., according to the U.S. Small Business Administration. However, no two businesses are the same, so ensuring that yours has appropriate financial safeguards in place requires understanding several essential aspects of business insurance.

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    States set insurance requirements for certain businesses

    The requirements for business insurance vary from state to state. Usually, you must have worker's compensation insurance, unemployment compensation insurance and disability coverage if you have employees. Most states require commercial auto insurance for their vehicles. However, it's best to check with your state for specific requirements.

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    Several types of business insurance are available to meet different coverage needs

    Business insurance is a general term for various coverages offering business owners financial protection. Some are best suited for those in manufacturing and distribution, while others are more suited for service providers. General liability insurance is popular among business owners since it applies to most businesses.

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    Business insurance costs are based on a number of variables

    As with any insurance policy, you must pay a premium for your preferred coverage. However, your insurance costs may vary depending on several factors. These include your location, employee count and payroll expenses. Even your industry and claims history may affect your premium.

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    Many business insurance providers offer online quotes

    You don't have to go to insurance providers’ physical offices anymore. Most of them allow you to get an online quote. All you must do is provide your information to get an estimate. It makes comparing business insurance costs more convenient.

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    Business owners can often bundle coverage to lower their costs

    Business owners can often bundle coverage to lower their costs. Some business insurance providers offer several types of coverage, and bundling can be an excellent way to save money when purchasing insurance. A business owner policy (BOP) is an example — it combines commercial property and general liability insurance.