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Why small businesses need general liability, property – and maybe cyber – insurance

Business (18)

Question: Hey Steve, I was wondering if you could give me a little insight. What sort of insurance does my small business really need? There are so many options, it get’s confusing. Thanks!

– Kasandra

Steve Strauss: Back in my lawyer days, I represented insurance companies for a while. And of course, I have bought plenty of policies over the years for my own small business. But to answer your question, I sought out a true expert.

Stephanie Bush is the Head of Small Commercial and Personal Lines for the Hartford, an insurance company that’s a great friend to small business. It’s been insuring small businesses for over 200 years.

Strauss: Let me start with an overview question. What insurance does the typical small business need? 

Stephanie Bush: “It certainly depends upon the kind of business, how large it is, whether or not there are employees. However there are some very common types of insurance that can be customized around each small business.

“Almost every business will need general liability insurance, sometimes called business liability. Among the things that general liability covers are the two most common risks – a customer getting hurt because of the business, in a slip-and-fall for example, and damage caused to a customer’s property because of the business activities.

“Property insurance is probably the next most common insurance a business will need and it covers their business property like equipment and inventory and their building if they have one.” (Note: Liability and property insurance are often combined into one policy called  Business Owner’s Policy or a BOP.)

Stephanie says some other types of insurance a small business might need are

  • Worker’s comp
  • Professionals may need a professional liability policy, sometimes called errors and omissions or E&O.
  • If a business uses vehicles, they will also need a commercial auto policy.

Strauss: In this online world we are living in, it seems like cyber or online insurance should also be something a small business should consider, right? 

Bush: “For sure, because today, any business can be vulnerable to a data breach or cyber-attack. As such, businesses need cyber or data breach insurance to protect their own proprietary data, as well as to protect their customers’ proprietary information. If customer information is compromised with a cyber-attack, the business owner can be responsible. Picking up the pieces after a cyber-attack can be challenging and expensive so this specific kind of insurance helps navigate the challenges and cover associated expenses.”


Strauss: What mistakes do you see small businesses make when it comes to insurance? 

Bush: “Small business owners manage a lot. They bring their unique gifts and passion to serve their communities every day. At the Hartford, we know that they need to be adequately protected so that they can keep doing what they love.

“A common problem is not having business insurance at all. All it takes is a theft, fire, a long power outage or a customer slipping and falling and a small business owner can find themselves without the help they need.

“The solution is to talk to an independent insurance agent who can help a small business owner understand how to be covered for their specific business in a way that is affordable. It truly is an easy process and we see the importance every day.”

Strauss: Anything else we should know? 

Bush: “Service matters and it should be easy and accessible to them online. It should be easy to check payments, go through a worker’s comp audit, get a certificate of insurance. The insurance company should have modern capabilities for service and have a reputation for taking care of their customers.”

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