Owning a small business can bring both rewards and risks, but having small business insurance can protect companies from issues that could harm their operations.
Of course, no two businesses are exactly alike, meaning each one needs a personalized business insurance policy. Understanding the risks that are particular to your industry can help you determine which coverage options will best protect your business.
Explore the types of small business insurance available, and how to choose the right policies based on your needs.
Assess Your Unique Business Risks
Small businesses in Hawaiʻi face many different risks, especially natural disasters. Earthquakes, wildfires, hurricanes, flash floods, and even tsunamis can cause significant damage both along the coast and inland.
Many companies also face risks as a result of their industry. Start by creating a list of potential risks, and then prioritize what you believe to be the costliest threats.
Estimate the potential impact if the risk should occur, including both the actual monetary costs and those damages that don’t quite have an exact dollar amount, such as environmental or social impacts.
This could include the loss of necessary services to an area. Next, determine how to manage these risks. Decide what actions are necessary and the potential repercussions from lack of action.
Understand Your Coverage Options
Whether you’re a new startup looking for insurance or want to replace your current policy with better or more affordable coverage, it’s important to know your options. Most small businesses should consider carrying the following policies:
General Liability
This broad type of insurance provides liability for general business risks. General liability policies can help cover attorney fees and medical expenses that result from property damage and bodily injuries for which your business may be held liable.
You can buy general liability insurance (GLI) as a standalone policy or bundled with other valuable coverages through a business owner’s policy (BOP).
Casualty
Casualty insurance, also known as liability insurance, protects businesses from the financial fallout that can follow legal claims. There are several lines of casualty insurance that small businesses can benefit from carrying, including:
Cyber Liability- Directors and officers’ insurance
- Employment practices liability insurance
- Errors and omissions insurance
- Workers’ compensation insurance
Auto
Commercial auto insurance is recommended for companies that use vehicles for business purposes. Auto insurance generally includes two types of physical damage coverage, including collision loss and comprehensive loss.
It also includes two types of liability coverage, which include bodily injury coverage and property damage coverage.
Property
Commercial property insurance covers the building from which the business operates, the contents inside the building, and any loss of income that may occur if it loses business due to a claim.
Property insurance can also protect a business in the event of a covered accident, such as theft, fire, or wind damage. Property insurance can be purchased as a standalone policy or bundled under a BOP.
Customize Your Business Insurance
Tailoring your business insurance to your specific field can help cover those associated risks. It’s also wise to work with an experienced insurance agent to change the scope and amount of coverage you need based on your business’s size, nature, and amount of risk you’re willing to take.
Look at important aspects of your business operations, such as your products, services, technology, equipment, and employees. Each of these can impact your level of risk. Also, be aware of potential legal or regulatory risks, especially those specific to your industry.
Other Things to Keep in Mind
Keep the following in mind when choosing insurance for your small business:
Research the Market: Most small businesses actually need a combination of insurance policies to meet all of their company’s needs. Carefully review all available insurance policies offered by your insurance provider to determine which may benefit your business.- Look Beyond General Liability Insurance: While some small businesses believe that they only need general liability insurance to stay protected, this broad form of insurance is not usually enough. Let an insurance agent show you the coverage options that best cover your risks and how they protect you.
- Know Local Insurance Laws: Small businesses in Hawaiʻi must meet specific insurance-related requirements to stay in compliance. With only some exceptions, Hawaiʻi state law requires businesses with one or more employees to carry workers’ compensation insurance. Commercial auto insurance is also required by companies that have business-owned vehicles.
- Reassess Each Year: Businesses change over time, meaning you need to reassess your insurance needs on a regular basis. Each year, review your business insurance coverage and costs to determine if they still align with your budget and needs.
Rely on Atlas for Business Insurance
Protecting your small business with the right insurance coverage at every step can contribute to your continued success. As a trusted local provider, we understand the risks that small businesses face and offer a comprehensive range of policies to protect against loss.
Trust Atlas Insurance Agency to protect your business. You can reach us at (808) 400-6634.