Small businesses, like family-owned retail stores or tech startups, thrive well in the American economy.
According to the U.S. Census Bureau, 99 percent of independent companies in the U.S. are small businesses that employ less than 500 individuals.
Defining Small Business
In its simplest definition, small businesses are privately-owned enterprises that employ a small number of individuals. They can be a corporation, a sole proprietorship, a partnership, or any other legal form.
The Small Business Administration (SBA) is the agency that assists small businesses all over the country. They generally consider small businesses as companies with less than 500 employees.
The definition also varies depending on specific industry sectors. Different sectors have their own set of limits which is specified by the SBA.
Size isn’t the only factor that the SBA uses to determine small businesses. They also have a set of parameters that help determine if the company is considered as a small business.
They define a small business as a concern that:
- Is organized for profit
- Has a place of business in the US
- Operates primarily within the U.S. or makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor
- Is independently owned and operated
- Is not dominant in its field on a national basis
Understanding the risks
Small businesses are as important as the big players that contribute to the economy. Starting a business is risky and successful business owners understand the concept of taking calculated risks very well.
Risks in a small business pile up as the company slowly grows. There’s risk of employee injuries, failing to make the business profitable, or failing to hire the best possible employees. The worst that can happen is to see the business fall apart entirely.
It’s part of the role of a smart businessman to protect his business from these misfortunes. This is where small business insurances come into play.
Protection through small business insurances
Various insurances that are fit for a small business are offered through different insurance providers. As business owners, it’s important to cover at least the basic insurances that the company should have.
Here are some types of coverage that business owners should consider getting:
General Liability Insurance
This policy protects your business against the most common risks. This secures the business from any damage that may arise from the business’s operation, such as bodily injury, medical payments, property damage, and some others.
Commercial Auto Insurance
This insurance plan covers work-related injuries and accidents from a company-owned vehicle. Personal auto insurance won’t generally cover these occurrences, therefore, this can come in handy.
Business Owner’s Policy
A Business Owner’s Policy or BOP is an insurance package that generally covers three elements: property, professional liability, and business interruption. A BOP is a cost-efficient plan since it’s a bundled service that essentially covers the basic risks of a small business.
Accidents in the workplace can happen. This can cost a pretty penny especially if the damage is quite extensive. Worker’s compensation gives protection to employees that get injured on the job.
Who needs coverage?
Every small business should get coverage as protection from potential risks especially during the startup years when the company cannot afford any losses.
Getting a small business insurance gives business owners peace of mind while focusing on keeping the business up and running.