What Types Of Insurance Do I Need For My Small Business?

What Types Of Insurance Do I Need For My Small Business?

What Types Of Insurance Do I Need For My Small Business?

There are certain types of insurance a small business should have in California. From the day an individual starts his own business — he probably knows that he exposes himself to certain kinds of risks. One lawsuit from a third party person due to the liability of the business, could probably wipe-out the hard-earned company. Besides, catastrophic events could also make a massive impact on the financial status of the business. It will be difficult for small businesses to get off the ground if a catastrophe happens — making it more essential to purchase a particular type of small business insurance. Small business insurance is a type of insurance that covers small businesses against inevitable losses that could arise during their policy period. Here is a list of insurance services small business owners must-have.

Types Of Insurance A Small Business Should Have

1.General Liability Insurance 

General Liability insurance is one of the types of insurance a small business owner must-have. Generally, This covers the liability of the insured against a third party person. It covers bodily injury and property damages the small business caused to others.

Furthermore, general liability insurance would cover the insured against legal claims a third party person files against the insured business owner.

Coverage Of General Liability Insurance For Small Businesses

Coverage A: Bodily Injury and Property Damages Liability

This coverage protects from losses that are due to the insured’s legal obligation to a third party person. This loss causes bodily injury and property damages to others arising out of the insured’s business operations and negligence. Also, emotional distress can be considered a bodily injury.

Coverage B: Personal And Advertising Injury

Personal and advertising injury coverage could protect the insured against legal claims arising out of specific offenses, such as:

    • Invasion of a third party person’s privacy

    • Defamation

    • Libel

    • Slander

    • False Arrest

    • Copyright Infringement

Coverage C: Medical Payments

This coverage provides payments for first aid and other necessary medical treatment to the injured third party. Besides, it can also cover the ambulance fee, care provider fee, and until the extent of a funeral. These medical payments coverage intends to provide basic pay for the injured, in the exchange of the injured, not filing a legal claim against the insured.

2.Workers Compensation

Workers’ compensation is a type of insurance that could protect business owners against losses due to their workers. This insurance can provide four types of benefits to the workers. Including the rehabilitation of the workers, the cost for its injury that arises during their employment period. Besides, it can also cover the worker’s diseases that occur in relation to their work and their operation.

Key Takeaways
  • Workers’ compensation is the mandatory insurance for all business owners throughout California.

  • Covered injuries of the workers must arise during his employment with the insured business.

Benefits Of Workers Compensation 

Medical Coverage

This coverage provides care provider expenses for unintentional accident injuries. Besides, it can also cover medical costs resulting from diseases due to the field of work. Medical expenses can cover the full cost of the employee’s medical fees — but under a specific amount of time only. Workers’ compensation insurance does not have deductibles and coinsurance; this is to prevent the insured from demanding medical services.

Income Replacement Coverage (Indemnity Benefits)

In worker’s compensation law, the insurance company must provide weekly income to the disabled worker. Income replacement coverage is only applicable if the disability of the worker results from the injury due to work operation.

Survivors Benefits

Suppose that the worker’s death is work-related, the jurisdiction will automatically provide income benefits to the surviving family members. This survivor’s benefit includes the priority, which is the surviving legal spouse and its dependent children. Besides, it can also provide for the cost of funeral services or burial benefits. In thirty jurisdictions, 66 percent of the workers’ average weekly wage, would be the benefit that has to give, to the surviving spouse and its dependents.


Many workers suffer a disability that is beyond income payments and ordinary medical services. Other patients require other help to bring them back to their former economic and social state. Rehabilitation to the workers includes physical-medical attention or therapy, to restore the worker to their health, antecedent to the injury. Besides, it can also provide psychological assistance to the worker if the worker suffers from mental trauma due to the injury. Workers’ compensation can also provide payment for the enrollment of the worker to a vocational course. It is a training for the worker to fit in a new function, in accordance with his current state.

3.Property Insurance

This insurance is a type of insurance that can cover the property of the business against covered losses. It can cover the building of the business and the properties that are attached to it. Besides, it can also cover the personal properties that are inside the building premises.

It can also cover the properties that are used in the business — even though it is outside the building. Also, the business properties within the 100 feet parameters of the structure of the business can be covered.

Coverage Of Property Insurance

  • the building structure of the business that is described on the declarations of the insured. It includes the following:

  • Completed additions

  • Permanently installed machinery and equipment

  • Indoor fixtures and outdoor fixtures

Personal Property Of The Business
  • Located inside or outside the building of the business insured. It can also cover the personal properties that are located within the 100 feet parameters of the building. Consisting of the following unless otherwise listed on the declarations.

  • Furniture and fixtures

  • Machinery

  • Business Stocks

  • Other properties

  • Leased or personal property for which the insured has a contractual responsibility

4.Business Owners Policy

Business insurance policy could cover small to medium-sized businesses. This insurance is a package policy that can encompass both the business properties and its liability.

Coverage Of Business Owners Policy

Property Coverage

Property coverage could cover the building of the insured’s business against covered losses. Besides, it can also include the personal properties of the insured that are useful in business operations.

Liability Coverage

This coverage would cover the business of the insured against bodily injury and property damages claims. The coverage will be applicable if the liability claims arise inside the premises of the company and its operations. It could cover the insured from the cost of settling claims and the cost of medical expenses.

5.Commercial Auto Insurance

This type of insurance could cover the vehicles of insured businesses against unexpected losses. Commercial auto insurance could cover the company against liability claims arising from a third party person. It can also include the insured business vehicle from collision and comprehensive damages.

Coverage Of Commercial Auto Insurance

Collision Coverage

Collision Coverage could cover the insured vehicle of the business against losses that could arise from the overturning of the car. Besides, collision coverage could also cover the accident of the vehicle that is due to colliding with another vehicle. Even colliding with another object can be covered.

Comprehensive Coverage

This coverage will cover damages to the vehicle of the insured if the damages are due to other-than-collision accidents. Comprehensive covergae could cover the cost of damages that are due to theft, fire, and earthquake. Besides, it can also cover animal damages and other more that are on the declarations page of the insured.

Covered Other-Than-Collision Losses
    • Theft or larceny

    • Explosion

    • Windstorm

    • Hail, water and flood

    • Vandalism

    • Breakage of glass

    • Riot and civil commotion

Medical Payments

Medical payments coverage is optional in some states. Some drivers consider it unnecessary if they have overlapping Health Insurance. However, it is more secure if the business adds this coverage to their policy. Medical payments coverage could pay the medical expenses of the driver — should he procures an accident while working for the insured business.

Liability Coverage

Liability coverage could pay for the liability of the insured to a third party person if the insured is held at-fault on the accident. It could pay for bodily injury and personal property damages the insured caused to others. Besides, liability coverage could also defend the insured against legal claims related to these damages.

Uninsured Motorist Coverage / Underinsured Motorist Coverage
Uninsured Motorist Coverage

This coverage pays for the bodily injuries of the insured that is due to an accident with another vehicle whose driver is negligent. Besides, the driver at fault has no liability insurance or if the insured was hit-and-run by the other driver. It can cover the driver of the business and anyone who is riding inside the insured vehicle.

Underinsured Motorist Coverage

This coverage would fill the gap when the party at fault doesn’t have enough liability insurance to cover the insured.

6.Professional Liability Insurance / Errors and Omission

Professional liability is a type of insurance that is also known as errors and omissions, which is insurance that can cover the liability of professionals. However, they are covering different types of practices. Professional liability insurance would cover the liability of professionals whose job is to advise clients. This business includes medical professionals and legal professionals.

On the other hand, errors and omissions cover the liability of business professionals whose job includes selling products. These businesses include insurance brokers, insurance agents, real estate brokers, and architects.

7.Directors And Officers Insurance

Directors and officers liability insurance would cover the liability of directors and officers of the company. D&O can indemnify the insured for the losses that could arise from alleged wrongful acts, until the stretch of their capacity. This insurance could extend up to the defense cost and investigations. However, illegal intentional acts are typically not covered by this insurance. Besides, this could prevent other officers of the company from filing a legal claim against the director of the company.

8.Data Breach

Data Breach Insurance is one of the types of insurance that are very important to all types of businesses. To alleviate the risk of a third party’s legal actions, the company must resolve the problem of data breaches quickly. Additionally, Data breach insurance is a type of insurance that could cover the business against unintentional leakage of private information. Data Breach could cover the cost for the quick responses if disclosure of confidential and sensitive information occurs. This insurance could also help businesses proper security measures to prevent their confidential information from leaking.

9.Product Liability Insurance

Product liability insurance covers the business against bodily injury and property damages an insured company caused to a third party person. It could cover the insured from settling legal claims that a third party person files against the insured. Besides, it can also cover the cost of treatment for the injury of a third party person.

10.Business Interruption Insurance

Business Interruption Insurance could protect the business’s income, should the company stops its operation due to covered damages.

Here at NEWS Insurance California, we can help you find these types of insurances to help all the business owners with protecting their hard-earned business against unforeseeable losses. Get A free quote here.

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