What Types of Insurance Do Small Business Owners Need?

Photo of small business office workers.Very small businesses often do not have employees and are therefore exempt from insurance requirements.

However, if your company does have employees, you may need the following insurance for small businesses:

Workers compensation insurance: This coverage can be purchased either through your state’s worker’s compensation insurance program or through a commercial insurance agent. Refer to the guidelines set by your state or speak with an agent in the Trusted Choice network for more information.

Unemployment insurance: This coverage is paid for through unemployment insurance taxes collected by your state. Once you establish and register your business with your state’s workforce agency, you will begin paying this tax.

Disability insurance: Small business owners are currently only required to purchase this insurance for their employees if they are located in one of the following six locations: California, Hawaii, New Jersey, New York, Rhode Island or Puerto Rico. Otherwise, this coverage is optional.

Medical insurance: Under the recently passed Affordable Healthcare Act, small businesses that employ more than 50 people could be required to purchase healthcare coverage plans for employees. Medical insurance for small business does not have to be unmanageably expensive. A Trusted Choice member agent can help you find insurance providers that offer affordable rates through group insurance for small business.

Regardless of whether or not you have employees, you may want to consider the optional coverage provided by a small business insurance policy.

What Is Small Business Insurance?

Small business insurance is an optional insurance plan that provides you with the coverage necessary to keep your business operational, especially in the aftermath of a catastrophe or a lawsuit. Catastrophes can include fires, major weather events, and accidents with extreme losses. Lawsuits can also devastate your business. These insurance plans can be customized to meet the inherent risks faced by your particular business.

Nearly half of all businesses that are forced to temporarily stop operations because of a natural disaster fail within five years. Of those that are unable to resume operations within 10 days, nearly 80 percent close within one month. A solid business insurance policy can prevent this from happening by allowing your small business to remain profitable, even in the face of disaster.

What Is a Small Business?

• There are more than 27 million small businesses in the United States.

• More than 70% of these businesses are owned and operated by a single person.

• 77 million people, or 57% of this country’s workforce, are employed by small businesses.

• Approximately 70% of all small businesses remain in operation 2 years after inception.

• Approximately 50% of all small businesses remain in operation 5 years after inception.

• 54% of small businesses are home-based.

Our partners at Trusted Choice and our independent agents can help you evaluate all the risks and create ways to protect your small business and family from potential liabilities. Give us a call today.

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