{"id":366,"date":"2017-09-01T09:54:55","date_gmt":"2017-09-01T09:54:55","guid":{"rendered":"https:\/\/www.insurancebee.com\/blog\/?p=366"},"modified":"2023-03-07T16:45:39","modified_gmt":"2023-03-07T16:45:39","slug":"small-business-insurance-questions","status":"publish","type":"post","link":"https:\/\/www.insurancebee.com\/blog\/small-business-insurance-questions","title":{"rendered":"Top five questions about small business insurance"},"content":{"rendered":"
\n
\"\"<\/figure>\n<\/div>\n\n\n

Even the most experienced SMB owners find insurance confusing at times.<\/p>\n\n\n\n

So here’s some answers to the most common questions we get asked about small business insurance.<\/p>\n\n\n\n

1. What does small business insurance cover?<\/h2>\n\n\n\n

It depends on the policy.  There are several kinds a small business might need. To make sure you’re properly covered, you might want to package a few together:<\/p>\n\n\n\n

General liability<\/strong><\/h2>\n\n\n\n

General liability insurance<\/a> protects your business from claims made by a third party. For personal and bodily injury (not related to your services), and damage to their property.<\/p>\n\n\n\n

Say a customer gets injured tripping over an electrical cable in your premises. Or, your ladder falls on to a client’s car, crushing the roof. Or, one of your employees is overheard making rude remarks about a client. And it gets back to them.<\/p>\n\n\n\n

Any of these incidents could result in a claim against you.<\/p>\n\n\n\n

General liability insurance protects your business, by taking care of the costs involved with claims like this. These include, repairs and replacement, legal fees, medical expenses, and compensation.<\/p>\n\n\n\n

You might want to add business personal property insurance<\/a> to your GL policy. It protects your equipment, including mobile devices, when you’re out and about.<\/p>\n\n\n\n

Errors & omissions (E&O\/professional liability)<\/strong><\/h2>\n\n\n\n

If a client claims you didn’t deliver what you promised. Or made a mistake (even if it turns out you didn’t) they can still sue you.<\/p>\n\n\n\n

Say you’re a real estate agent and you don’t tell a buyer some wooden windows need treating for termite infestation. They only discover this after they’ve moved in. They have to hire an exterminator. And get all the windows replaced.<\/p>\n\n\n\n

Your omission cost them money. It’s only natural they’ll come after you to recoup it.<\/p>\n\n\n\n

Errors and omissions insurance<\/a> can take care of the costs of a claim. These include hiring you an attorney, legal fees and compensation, if you’re liable.<\/p>\n\n\n\n

Workers’ compensation insurance<\/strong><\/h2>\n\n\n\n

The moment you hire an employee, most states require you have\u00a0workers’ comp insurance<\/a>.<\/p>\n\n\n\n

Even if it’s not law in your state<\/a>, though, you might still want to get it.<\/p>\n\n\n\n

It protects your business from employee claims for workplace injury.  Which can end up costing. A lot.<\/p>\n\n\n\n

It’s not just the loss in production, without insurance, you’ll have to find the cash for medical bills, replacement wages and legal fees.<\/p>\n\n\n\n

Workers’ comp can take care of all these. And protect your business from a lawsuit, if you’re sued.<\/p>\n\n\n\n

Director\u2019s & officer\u2019s  (D&O)<\/strong><\/h2>\n\n\n\n

Directors’ and officers’ insurance<\/a> protects board members of an organization by covering the costs of a\u00a0 lawsuit. It’ll protect for-profit firms as well as non-profit.<\/p>\n\n\n\n

It’ll protect you from claims you’ve failed to do something. Or something you’ve done wrong. Like not keeping on top of legislation, or making sure health and safety measures are up to date. Or mismanaging company finances.<\/p>\n\n\n\n

Cyber liability<\/strong><\/h2>\n\n\n\n

If you’ve been hacked, cyber liability insurance<\/a>\u00a0takes care of the recovery costs. Because it’s not the cyber attack that will put you out of business. It’s the enormous expense of recovering from one.<\/p>\n\n\n\n

What cyber insurance can’t do, is stop you being hacked. So step up your defenses. And get cyber coverage.<\/p>\n\n\n\n

If you’re still not sure which policies you need, read our guide on what type of insurance your small business needs<\/a>.<\/p>\n\n\n\n

2. What’s an insurance cancellation policy?<\/h2>\n\n\n\n

Cancellation policies can vary a great deal from carrier to carrier. Always read the small print, so you understand your policy and how you can cancel.<\/p>\n\n\n\n

In some circumstances, insurers will offer a cooling off period. But don’t just assume this is the case. It’s best to check the section on cancellation in your policy documents.<\/p>\n\n\n\n

If you don\u2019t want to commit to signing a policy before you know what the carrier’s cancellation conditions are, just request a sample policy document.<\/p>\n\n\n\n

3. Does my insurance cover my employees paid on 1099?<\/h2>\n\n\n\n

This is a bit of a grey area. Typically, a general liability policy won’t cover employees paid on a 1099. In most instances, it’ll only  cover them if they’re employed directly.<\/p>\n\n\n\n

E&O insurance might cover 1099 employees. But it all very much depends on the policy.<\/p>\n\n\n\n

To find out who your policy actually covers, it’s best to check your policy’s wording. It should be made very clear under \u2018Definitions\u2019 or ‘Who is an Insured’.<\/p>\n\n\n\n

4. What’s a certificate of insurance, an additional insured, and a certificate holder?<\/h2>\n\n\n\n

Before you start working with them, some clients require proof of insurance. This so they can make sure you’re covered for damage to a property or person, or mistakes you might make, while working for them.<\/p>\n\n\n\n

Your certificate of insurance is the document you can use to prove to your client you’ve got the right policy. It’ll show:<\/p>\n\n\n\n