Starting your own business is always a scary prospect. It’s like standing on the precipice of the airplane door just before skydiving; you’re really scared, but excited too! And unless you come from money, chances are you will start out small. You might have put all your life’s savings or taken out a loan to help you start off anyway, but sometimes due to a lack of knowledge or experience in running a business you will encounter problems. Problems that you could potentially overcome, or as is the sad reality sometimes, could drag your business down with them.
This is why when you’re jumping out of an airplane that’s flying at a height of 15,000 feet you make sure you’ve got a parachute strapped on, in the case of small businesses that parachute is insurance. While most if not all small business owners will invest in the usual Business owner’s insurance and liability insurance, not many people are aware of options they have to cover all bases in the event that they face the aforementioned roadblocks. Remember though, that your small business is your baby, job loyalty is one thing, but when it comes to owning a business it suddenly becomes personal, so make sure you’ve got everything covered when it comes to your small business. To help you do this, I’ve compiled a list of insurance options that might have slipped your attention but are extremely helpful to small business owners.
5 lesser known insurance options for small business owners
- Overhead expense protection. As the owner of the small business, you are the heart and soul of your business. Just imagine what would happen if you were unable to work for a period of time. Your business while in the hands of your subordinates might still function, but it will obviously lose out on its productivity due to you not being there. To protect it in this eventuality, and let’s be honest all of us face situations where we have to put work on the backburner, investing in overhead expense protection might be wise so that your business has a fall back option in case you are otherwise engaged.
- Business interruption insurance. You never know when or how your business could be interrupted. A long term power outage, flooding, a tornado, and storms, even something as innocuous as a termite infestation could shut business down for a long time. Do you have the funds to keep your business afloat in a situation like this? If the answer to that question is no, then it’s quite obvious that you need business interruption insurance, so that when your business is held up for a length of time, it doesn’t end up staying comatose forever.
- Fraud insurance. While we would like to think otherwise, there are unscrupulous people everywhere. You might have hired one without realizing it, and the next thing you know you’ve been defrauded by him or her, and they’re enjoying the fruits of their illicit labors on a beach in Hawaii while you’re stuck dealing with the consequences. Sure you’ll sue them but can you slug it out for all those years that the courts might take to bring you justice, and more importantly the money that was fraudulently stolen from you? Isn’t it just safer to invest in a fraud insurance policy and have one less eventuality to worry about?
- Data breach. Small businesses are being targeted by hackers these days, for a variety of reasons you could lose sensitive data either by electronic means or through even a file full of hard copies. Such a breach can wreak havoc into even the most stable businesses, and is so difficult to guard against as even government sites and big conglomerates with massive firewalls have been known to be comprised by an enterprising hacker. So if you are dealing in sensitive information this might be an option worth looking into.
- Errors and omissions insurance. Most small businesses are heavily human labor intensive, and this means there is a margin for human error no matter how careful you are. Especially if you’re a part of the service industry, this kind of insurance policy is great so that if one of your employees do make a mistake, you don’t have to pay for it, the insurer does.
While these insurance policies aren’t part of everyday knowledge they do exist and can be found at the offices of any major insurance firm. Westfield insurance, Amica Mutual Insurance, GAINSCO, SafeAuto, The Hartford or any other big insurance company will be able to help you with these policies so ask around, compare prices and get yourself that parachute so that you enjoy the thrill of the dive and still end up landing on your feet.
Elvis Donnelly is a father of two who works from home and lives with his wife. He is a voracious reader and likes to keep abreast of current affairs on personal finance, technology and innovation, and takes a keen interest in environmental issues. In his spare time, he loves taking on home improvement projects and considers himself a closet chef.