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Insurance Considerations for Small Businesses

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Opening a small business brings excitement as well as uncertainty. As a small business owner you face many risks, but there are steps you can take to protect yourself against them. Obtaining insurance coverage is one big way you can protect your small business and help minimize many of the risks you face.

The kinds of insurance you will need to protect your business will vary based on what type of business you run, how it is structured, and where it’s potential liabilities fall, so make sure you speak with a lawyer about what specific protections your business needs.

At a bare minimum, if you provide services, you should have professional liability insurance to cover you against negligence claims from errors or omissions. If your business produces a product, you will also need products liability coverage. This coverage will protect you if you are sued because a defective product harmed someone.

If you have employees, even just one, you also need to have workers’ comp insurance. This covers medical care, disability and death benefits for an employee who was injured or killed as a result of the work. And, you may want to consider employment practices coverage, which will pay for you to have a lawyer represent you if you are ever sued by an employee, which is one of the biggest lawsuit risks you have as a business owner.

Most businesses also need some form of property insurance. If you have a home-based business, some losses may be covered by your homeowners’ insurance, but be sure to check your policy thoroughly. And you will definitely need separate insurance to cover business assets such as inventory and equipment.

You will need vehicle insurance if you have a vehicle for your business. Your personal auto insurance policy may cover you for some limited business use, but you won’t be covered if the vehicle is used primarily for business purposes. Make sure you optimize your policy to suit your businesses’ needs.

Business interruption insurance covers your day-to-day losses in the event you experience a closure or some other barrier to normal operations. This can help keep you afloat while cash flow is reduced.

And, of course you will want to consider personal insurance, such as disability coverage for yourself, in case you cannot work, and life insurance, as well, to cover your family and business in the event of your death.

As you can see, there are several types of insurance coverage for small businesses. Businesses in certain industries, such as manufacturing or logistics, may need additional insurance policies to cover industry-specific losses.

Knowing what types of insurance you need and the amounts that are right for your business and family is crucial, and it is not uncommon for business owners to need help with this step.

A good place to start is speaking with a trusted legal advisor who can help you determine what kinds of legal risks you face and what kind of insurance you need. Sit down with us as your lawyer to discuss how to best protect your business. Choosing the right insurance package can make all the difference in your business’s stability and security.

This article is a service of Kundani & Chang LLP. We are an award-winning law firm that specializes in business and estate planning for clients like you. The goal for every family is to stay educated on all topics like this, avoid probate, avoid estate taxes, and build a legacy for you and your loved ones. What sets our firm apart is that we build lasting, lifelong relationships with our clients. They rely on us to keep them updated, provide sound legal counsel, and be there for them immediately if any problems should ever arise. The best part is we don’t charge hourly fees to our families, so you never have to worry about speaking to us. If you’re ready to keep your family out of Court, contact us today to schedule an initial consultation or visit our website at

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We want you to feel comfortable discussing your legal issue with us, so we offer a free consultation to learn about your problem. Contact us today to setup a time to come in and talk with our team.