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How to Choose the Right Business Insurance Based on Your Business Size

man covering group of people cutouts portraying how to choose the right business insurance

The path to finding the perfect insurer that’ll cover all of your business needs can be a long and winding road. However, before you begin your search for business insurance, it’s important to take into consideration your business size and what that means for the needs you’ll have down the road. Read on for tips on how to choose the right insurance for your business.

Home-Based Businesses

A lot of successful businesses start from your home (just look at Steve Jobs or Jeff Bezos). Typically, home-based businesses are made up of one or two employees and have relatively little revenue. But just because your business is small, doesn’t mean you don’t need insurance.

A lot of people fall under the belief that because their home is insured, the insurance will also cover their home-based business activities. Not only is that false, but home-based business activities can actually void your home insurance. Using your home for any purpose your insurer isn’t aware of could invalidate your policy.

Policies to consider:

  • Business Property Insurance
  • General Liability Coverage
  • Product Liability Coverage
  • Errors and Omissions Insurance

Small Businesses

If you know all of your employees by name, or you make a few million dollars annually, chances are you’re a small business owner. Some insurers consider small businesses to be those that are operating with 50 or fewer employees, but the SBA defines it as one that is independently owned and operated, is organized for profit, and is not dominant in its field.

Policies to consider:

  • Professional Liability Insurance
  • Commercial Umbrella Insurance
  • Business Owner’s Policy
  • Property Insurance
  • General Liability Insurance

Medium-Sized Businesses

Once your small business has grown and is thriving, you fall into the category of a medium-sized business. These are businesses that have between 50-1,000 employees with annual revenues between $10 million to $1 billion. Typically, insurers will have special policies that are designed specifically for businesses that fall in this category. As your business starts to grow, insurance policies tend to change – especially now that you have more employees and machinery.

Policies to consider:

  • Employment Practices Liability Insurance
  • Business Interruption Insurance
  • Property Insurance
  • General Liability Insurance
  • Worker’s Compensation Insurance
  • Cyber Liability Insurance

Large Businesses

Large businesses are complex, bringing in millions, if not billions of dollars in revenue every year. With billions in business comes multi-million dollar risks. Big businesses are so complex and diverse that insurers will more often than not customize policies and coverages that cater to the company’s specific needs. These large companies and corporations usually have a risk management team in play that will help advise in devising plans to minimize cost and damage should a loss occur, including purchasing insurance and managing claims.

Policies to consider:

  • Employment Practices Liability Insurance
  • Business Interruption Insurance
  • Property Insurance
  • General Liability Insurance
  • Worker’s Compensation Insurance
  • Cyber Liability Insurance
  • Professional Liability Insurance
  • Key Executive Insurance

Need help determining where your business falls and what types of policies you need? Reach out to us here. We identify the critical issues facing your company to help you find the smartest way to protect your business.