This week in the Freedom Friday blog we're concluding the series the 10 Steps to Starting a Small Business in Oklahoma. If you missed the blog posts for the previous steps, I've provided links at the end of this blog post to help you catch up.
In today's Freedom Friday blog, we're going to cover the tenth step in starting a small business in Oklahoma, which is to obtain insurance for your small business. As a small business owner, you've made a significant investment in your small business. You have developed a business plan, gathered your team, chosen a business entity, obtained an EIN from the IRS, opened bank accounts, obtained licenses and permits, found financing, if necessary, and chosen a location and/or target audience for a great product or service which your small business offer. All of this is essential, but it is critical to protect your business through obtaining insurance.
There are four types of insurance which you should consider as a small business owner. The first type of insurance which you should have is a general liability insurance policy to protect your small business and the product or service your small business is offering. General liability insurance is an insurance policy that will protect your small business from a wide variety of risks. It is also known as commercial general liability insurance. It is a cost-efficient and effective way to keep your small business safe from unexpected costs from lawsuits, accidents, or other actions taken towards your small business. General liability insurance will protect your small business if someone is injured on your business's property and will cover damage caused by you or your employees in some instances. When evaluating general liability insurance policies, you should be more concerned with obtaining a good coverage rather than cost. A cheaper policy may expose you to greater risk. You should also make sure you understand the policy limits, premiums, deductibles and exclusions. Also, always consider the reputation of the insurance provider, making sure they are a licensed insurer.
The second type of insurance which you should consider as a small business owner is workers' compensation insurance. In Oklahoma, workers' compensation insurance is mandatory if you have one or more employees. Workers' compensation insurance is a type of policy designed to cover an employee's medical expenses and other losses due to a work-related injury. Workers' compensation insurance will provide financial assistance to injured employees, protect your company in the event of a lawsuit, and minimize the risk of employee lawsuits.
The third type of insurance which you should consider is professional liability insurance, also known as errors and omissions (E & O) coverage. Professional liability insurance is for small businesses which offer professional consulting or advisory services, such as attorneys, accountants, consultants, and many other professional occupations. Professional liability insurance protects against claims of inaccurate, negligent, or undelivered work. If you or an employee make a mistake that costs your client money, your client might sue to recover their losses. Professional liability insurance will cover your legal fees for alleged inaccurate work. If the work you provide does not live up to standards of quality set by state laws, industry norms, or contractual obligations, your client could sue you for negligence, and professional liability insurance can cover claims arising from that alleged negligence. Contracts for professional services can also have clauses regarding effects on the client's business after the work is completed. If a certain level of sales or profit isn't reached, the client might sue you for undelivered results, and professional liability insurance can cover such claims.
Lastly, the fourth type of insurance which you should consider is business interruption insurance. Business interruption insurance provides coverage for when your small business operations are interrupted by unforeseen circumstances, such as damage to the business's property, or a personal injury to the small business owner. When you are evaluating business interruption insurance policies, you should consider the unique risks your small business faces, based on your location and industry. Not all business interruptions will be covered. You also need to consider the time it will take to get your small business going after the interruption, and make sure policy covers you for an appropriate amount of time. Lastly, online businesses are susceptible to cyber security breaches, and so if you own an online business, you need to make sure the business interruption policy will cover such cyber incidents.
If you've missed the blog posts for the previous steps, here are some links to get you started:
Step 1: Develop a Business Plan
Step 2: Gather Your Team
Step 3: Choose Your Business Entity
Step 4: Draft Your Operating Agreement or Bylaws
Step 5: Apply for an EIN
Step 6: Open Business Bank Accounts
Step 7: Apply for Licenses and Permits
Step 8: Find Financing
Step 9: Choose a Business Location or Audience
If you're interested in starting a small business anywhere in Oklahoma, or if you have a small business and you are looking to grow, please feel free to contact me at [email protected]. For more information about Liberty Legal Solutions, LLC, please visit our website http://www.libertylegalok.com.