Who Needs Business Insurance?

9 Ways Insurance Protects Business Owners

Why Do I Need Business Insurance?

Whether you're freelancing on the side, running your town's hottest café, or otherwise being your own boss, you can probably benefit from business insurance.

Surprised? Don't be.

In the last five years, the population of people who need business insurance has grown significantly.

That's because it's become easier than ever to be a business owner. Driving for Uber or Lyft qualifies you. So does completing even a couple contract jobs. And while working for yourself means a lot more freedom, it also opens you up to certain types of risk unique to business owners.

The good news: business insurance can protect you from those risks. Here are nine specific ways business insurance can keep you (and your source of income) safe.

9 Reasons You Need Business Insurance

Business insurance is like a seatbelt: it can save you if something goes wrong. But even when things go right, business insurance can power your growth. Specifically, the right policies can help you:

  1. Sign commercial leases. A lot can go wrong when you own a building. That's why landlords typically want their tenants to carry General Liability and Property Insurance. In fact, most landlords require proof of insurance before they'll rent you a commercial space.
  2. Win more clients. The bigger a client, the more likely they are to require you to sign a contract. And chances are, that contract will require you to carry Errors & Omissions Insurance. Why? Because having insurance means that if something goes wrong, you can pay for it (so they don't have to). Maintaining active insurance means you're one step closer to signing your next client.
  3. Comply with state laws. Businesses that have employees are required to carry Workers' Compensation Insurance in 49 states (Texas is the exception). But regardless of the laws where you live, it's smart to invest in coverage that can pay the bills if your employees are injured on the job. (See a full breakdown of Workers' Comp laws by state.)
  4. Handle costly legal bills. Even owners of small businesses are targets for lawsuits. If a visitor has a slip-and-fall accident on your property or you sell a product that hurts someone, you could get sued. The appropriate insurance, like General Liability Insurance with Product Liability coverage, offers lawsuit protection so legal bills don't drain your bank account (or force your business to close).
  5. Recover from storm damage. Just as your homeowner's insurance can pay for repairs and replacements if you're hit with bad weather, Commercial Property Insurance can pay to repair and replace your business gear, property, and equipment after certain storms, vandalism, and theft. (Tip: most Insureon customers can save money by getting their Property coverage in a bundle known as a Business Owner's Policy.)
  6. Secure your income. If you're forced to shut down by a fire or another event covered by your Property Insurance, you can actually receive insurance payouts to replace your lost income, thanks to Business Interruption Insurance. This little-known gem can be added to a Business Owner's Policy and can make the difference between recovery and shutdown when the worst happens.
  7. Cover data breach damage. Data breaches are scary and they're not going away. Luckily, Cyber Liability Insurance can soften the blow if your business is hit. It helps cover ransom payments to hackers, customer notification costs, and other recovery efforts. (To get a Cyber policy from Insureon, click the "General Liability and Business Property" box in our application. Eventually, you'll be asked if you want to add Cyber coverage.)
  8. Cover your business driving. Whether you haul tools between worksites or rent cars when you're traveling to meet clients, Commercial Auto Insurance (or Hired and Non-Owned Auto Insurance) can cover damage and liability just as your personal auto insurance does. (Tip: if you have a vehicle titled to your business, Commercial Auto is likely the policy for you; if you or your employees drive personal vehicles for work purposes, Hired & Non-Owned is probably the better choice.)
  9. Save at tax time. Like most business operating expenses, business insurance is tax-deductible. Who doesn't want another deduction in April?

Want to find out which policies align with how your business runs? Check out Policy Buddy, our two-minute diagnostic. Tell us the basics about your business and we'll suggest policies.