It's becoming more and more common for individuals to start a business offering their personal skills as a service, or providing unique products to their audience. With these small, one-person businesses, it can be very important to get business insurance to protect the outcome of the business. Here is a guide to business insurance in these cases.
Why Is Insurance Important?
Business insurance may be especially important in the case that there is one person operating a business. You may not have a large amount of spare cash and time to deal with a lawsuit against your business. Having the right business insurance coverage is a way to safeguard your business against a legal issue that could drain your checking account and potentially put your small business out of operation. And if someone files a claim against your business, it helps to have it go through a knowledgeable business insurance representative rather than taking your personal time and energy.
When Should You Get Insurance?
In an ideal situation, you would have business insurance coverage from the very start. Many people wait until they are sure that their new business venture will be successful and profitable before getting it insured.
What Kind of Insurance Should You Get?
Now, the tricky question is what types of insurance to get as a solo entrepreneur. If you approach a business insurance broker, they will have the best information about which types of insurance are applicable to your business industry and setup.
General liability insurance is a good one to start out with. It's a well-rounded policy that can help you cover issues in a variety of areas of your business. If you're working from home and have a lot of business equipment or product with you, then commercial property insurance is another one to get from the start.
For people providing a professional service, check with your industry about the types of errors and omissions insurance needed (or suggested) to practice in your field. Professional insurance can also protect your creative property and help you in case another person or business feels that you have infringed on their intellectual property. For those with a product, product liability insurance is a great idea if your product hasn't undergone thorough testing and design evaluation yet.
As you can see, there are many directions to go with business insurance for small businesses; doing some risk assessment and targeting the areas where you need the most coverage is a good place to start.