Every company needs to have business insurance to keep it protected in times of need.
Small business insurance is imperative to help your business get through tough times if they ever happen. It protects your business in situations of liability claims, if you suffer property damage or in other unfortunate scenarios.
If you don’t have the proper business insurance in place, you could find yourself in a very difficult position if the unexpected occurs. You could be held liable for damages sustained by employees hurt on the job, for example, or against a claim from a client and/or business partner.
That’s why having the proper business insurance is of the utmost importance.
What insurance does your business need?
What type of insurance you need depends on a number of factors. These factors include the type of business you have, whether you have employees, whether you drive for your business, what state you are located in and what industry your business is in.
Below, we’ll break down the type of insurance you should have in a few specific industries.
Business Insurance Needed in the Restaurant Industry
Businesses in the restaurant industry are recommended to carry some general insurance policies as well as some specific policies for their type of business.
First and foremost, restaurants should carry commercial general liability insurance.
This will protect your business in case a patron sues your restaurant due to damages sustained while at your restaurant. For example, if a patron slips and falls on a wet floor at your restaurant, your commercial general liability business insurance will cover these losses. This insurance will also cover other potential losses.
You’ll also want to carry property insurance to protect your building and the contents of your restaurant. This will cover your business in the case of vandalism, fire or flooding, for example. This will cover the losses of your restaurant and its contents sustain.
If you run a restaurant, you have employees. Therefore, it’s important that you cover workers compensation in case an employee is hurt while on the job. Burns, falls and other injuries can sometimes occur in a restaurant, so you’ll want to make sure you have a business insurance plan that can cover your employees’ medical expenses, lost wages, and rehab costs.
If your restaurant serves liquor, you’ll also want to consider carrying a liquor liability insurance. It could happen that, people who you served alcohol gets injured after they leave, sue your restaurant to try to hold it accountable for the injuries sustained. Your liquor liability business insurance would cover you in this case.
The average annual cost of these four types of insurances for a restaurant is about $4,300.
Of course, this cost will vary greatly depending on your location, the size of your business and what types of insurance plans you choose.
Business Insurance Needed in the Construction Industry
If you are in the construction industry, you will most likely be required by law to carry specific business insurances. What types you will be required to have, and how much they cost, will depend on your state.
The first type of business insurance you should carry is general liability insurance, which will cover your business for the most common accidents that happen on a construction site. Included in this are bodily injuries to people and any damage to property that happens while you or your employees are working on a job site.
The median policy premium of this type of insurance varies between $361 and $924 per year.
The second type of business insurance you should carry is workers’ compensation.
Injuries can happen because of the physical activity and the use of heavy machinery that is required of employees in construction. This policy will cover your employees in case they get injured on the job.
This type of insurance ranges from 75 cents per $100 in employee wages to $2.74 per $100 in employee wages, depending on your state.
Because most likely you will have company vehicles that you, and possibly even employees, will drive for the job, it’s important that you carry commercial auto insurance as well. Any person who drives one of your company vehicles for a job is required by law to have commercial auto insurance.
The average cost of this insurance for small business owners ranges from $750 to $1,200 annually per vehicle.
Construction businesses also should consider license/permit bonds. This type of business insurance protects you in case a contractor you hire doesn’t deliver on their responsibilities as outlined in a contract.
The median policy premium for this type of insurance is between $100 to $185.
Business Insurance Needed in the Hospitality Industry
Those in the hospitality industry are recommended to carry the main types of business insurance:
- general liability insurance
- commercial property insurance
- workers compensation insurance
- commercial vehicle insurance
- liquor liability insurance
The insurance needs for the hospitality industry can vary greatly depending on the type of business you own and where it is located.
For example, if you run a resort hotel on the beach, you will probably want to carry business insurance that protects you from floods or other natural disasters.
Your costs will also be significantly higher in this situation compared to the costs if you own a small boutique hotel.
The average business insurance costs for a limited service hotel may be approximately $280 per available room, while that cost may average $1,126 per available room in a resort hotel.
In addition to those general forms of insurance, you also want to consider carrying business insurance for product liability. Most likely, your business will sell products, and you want to make sure you’re protected in case a product you sell causes injury or sickness to one of your customers.
You’ll also want to make sure that you carry building insurance and contents insurance to protect both the building and everything inside in case of a fire, flood, vandalism, burglary or other events.
This type of business insurance is extremely important in the hospitality industry, as the buildings are large and often have a lot of valuable things inside.
Find the Right Business Insurance for Your Company
While business insurance is not a cost that most business owners like to pay, but it’s a necessary evil if you own a business, no matter what industry you’re in.
There are situations that arise when you own a business that may result in you getting sued or being liable for damages someone else incurs.
At the same time, you may have a situation where your business sustained damages as a result of bad weather.
In all of these circumstances, having a good business insurance policy will ensure that you don’t suffer too many long-term damages as a result. While insurance can sometimes be more expensive than what you intended to spend, it’s always a good financial decision to have proper business insurance, as it can save you a lot of money if you run into any problems or inconveniences.
If you need extra money to help you pay for business insurance or other costs, consider taking out a business loan with us. Whatever your financial needs, Camino Financial is here to help, after all, our motto is “No Business Left Behind.”
By using our small business loan calculator, it’ll be easy to figure out how much a business loan might cost you. Simply plug in your desired loan amount, payment term and monthly interest rate, and you’ll be able to see how much your monthly payment will be.