If you own a small business, you may be curious about what kinds of insurance you need to invest in to protect yourself against damages, or if you even need to invest in insurance at all.

Well, small business insurance is one of the most important purchases a business owner can make for their company. The policy options included in small business insurance plans can help you keep your business running, offset medical expense costs, and help you protect your finances against expensive damages.

But with all the policy options available today, it may be difficult to determine which ones will be the best fit for your needs. To help you better determine your coverage needs, here is a list of nine of the most important insurance investments any small business can make starting with a good general liability insurance policy.

General Liability Insurance

As its name would suggest, this policy type covers a wide range of general damages. Typically, a general liability insurance policy will work to offset legal costs you may face as a result of negligence, accidents, injuries, or other specified damages. The funds granted in a successful general liability claim are often used to cover expenses related to physical harm, property damage, libel, slander, and other settlement or lawsuit charges.

Product Liability Insurance

If your small business operates to manufacture, wholesale, distribute, and retail products, a product liability insurance policy can benefit you. This coverage type specifically protects you from financial losses that you may face if any of your products are determined to be defective or if they cause bodily injury or harm. 

Professional Liability Insurance

Professional liability insurance, also known as errors and omissions insurance, is a specific kind of liability coverage that can protect your small business from malpractice suits, errors, and negligence relating to the services you provide to your customers. In some cases, small businesses are legally required to carry this policy type, depending on their state and profession.

Commercial Property Insurance

“Property” is a very broad term legally, so it’s no surprise that commercial property insurance can cover a wide range of potential damages. These can include but are not limited to, lost income, business interruption, and damages to computers, buildings, company papers, and finances.

Typically, a commercial property insurance claim must relate to one of several specifically delineated damages. Most commonly, these can include damage caused by fire, smoke, wind, hail storms, civil disobedience, and vandalism.

Home-Based Business Insurance

If you operate your small business out of your home, you may need home-based business insurance. Many small business owners make the mistake of thinking that they don’t need a business-specific policy for their homes if they already have homeowners insurance, but they fail to note that homeowner’s policies don’t usually provide coverage for home-based business losses. Those can only be recovered or made up with the help of a home-based business policy.

If your home-based business has low-risk factors, you may be able to get a rider on your existing homeowner’s policy that can provide coverage, but the higher your risk factors are, the lower your chance will be of fitting your homeowner’s policy to your business needs.

Worker’s Compensation Insurance

Worker’s compensation insurance exists to help your employees if they face a work-related injury or illness. It covers four main categories including medical expenses, lost wages during a recovery period, disability benefits, and funeral expenses, but other specified expenses may also be covered.

Commercial Auto Insurance

If you use any vehicles at all in your work as a small business owner, you need to invest in commercial auto insurance. This policy type protects you and your employees if either of you is determined to be at fault for an accident. The funds granted in a claim payout can offset medical bills, vehicle repair expenses, and other related costs.

Small businesses that do any of the following will especially benefit from this policy type:

• If you have employees who drive leased, rented or owned company vehicles
• If you own, lease, or rent vehicles for your business
• Or if you have employees who use their personal vehicles for work

Note that if you’re using your personal vehicle for work, your pre-existing auto insurance policy may not cover you if you’re using the vehicle work at the time of your accident.

Cyber Liability Insurance

Small businesses and larger companies alike rely heavily on online tools for their work. Often, they will use a digital network to store important business documents, employee files, customer and client information, financial information, and much more. But while storing all of this information digitally is very convenient, it also introduces the possibility of a new threat: cyber damage.

Hackers are able to plant viruses and break into your files with relative ease. Then, they can steal your information to use personally, destroy, or sell. That’s why it’s so important to make sure you have appropriate coverage to offset the costs of these damages. Cyber liability insurance can provide financial assistance that will enable you to notify customers, patients, and employees, hire a public relations team and offer credit monitoring services to data breach victims.

Business Income Insurance

Business income insurance is a lesser-known insurance option, but it can be incredibly helpful if you lose your income as a result of covered damage. Typically, business income insurance works by replacing part or all of your lost revenue during a temporary shutdown caused by covered damages. These usually include wind damage, theft, and fire among other damages.