This week in the Freedom Friday blog and email newsletter, we're continuing the series 10 Steps to Take Your Small Business to the Next Level.  Today we're going to cover the ninth step in taking your small business to the next level, and that is to obtain business insurance.  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, and so much more.  All of this is essential, but it is critical to protect your small business by obtaining insurance.  There are four types of insurance which you should consider as a small business owner:

1.  Commercial General Liability Insurance

The first type of insurance which you should consider getting as a small business owner is commercial general liability insurance, which is an insurance policy which will protect your small business from a wide variety of risks.  It is a cost-efficient and effective way to keep your small business safe from unexpected costs from lawsuits, accidents, or other actions taken against your small business.  Commercial 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 you evaluate commercial general liability insurance policies, you should be more concerned with obtaining a good coverage rather than cost.  A cheaper policy may expose your small business 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 carrier, making sure they are a licensed insurer (and that also goes for a broker if you're using one to obtain insurance on your small business's behalf).

2.  Workers' Compensation Insurance

The second type of insurance which you should consider getting as a small business owner is workers' compensation insurance.  Workers' compensation insurance is mandatory if you have any employees.  Workers' compensation insurance is a type of policy designated to cover an employee's medical expenses and/or other losses from being injured on the job.  Workers' compensation insurance will provide financial assistance to an injured employee, protect your small business in the event of a lawsuit, and minimize the risk of lawsuits from your employees due to work-related injuries.

3.  Professional Liability Insurance

The third type of insurance which you should consider getting for your small business is professional liability insurance, also known as errors and omissions (E&O) coverage.  Professional liability insurance is for small businesses which offer professional services, such as attorneys, accountants, financial advisors, consultants, and many other professional occupations.  Professional liability insurance protects your small business 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 your small business for negligence, and professional liability insurance can cover claims arising from that alleged negligence.  Contracts for professional services can also have clauses regarding effects of the client's business after the work is completed.  If a certain level of sales or profit isn't reached, the client might sue your small business for undelivered results, and professional liability insurance can cover such claims.

4.  Business Interruption Insurance

The fourth type of insurance which you should consider getting as a small busines owner is business interruption insurance.  Business interruption insurance provides coverage for when your small business operations are interrupted by unforeseen circumstances, such as damages to the business's property, or a personal injury to the small business owner.  When you're evaluating business interruption insurance policies, you should consider the unique risks your small business faces, based on your location and industry.  Not all business interruption events will be covered.  You also should consider the time it would take to get your small business going again after the interruption, and make sure the policy covers your small business for an appropriate amount of time.  Lastly, online businesses are susceptible to cyber security breaches, and if you own an online business, you need to make sure the business interruption insurance policy will cover cyber incidents.

If you are interested in starting a small business anywhere in Oklahoma, or you are interested in taking your small business to the next level, please contact me at [email protected] to schedule a FREE strategy session.

For more information about Liberty Legal Solutions, LLC, please visit our website at http://www.libertylegalok.com/