The Gild Guide: Most Common Small Business Insurance Questions

Insurance can be an overwhelming and complicated topic which can leave both new or seasoned small business owners intimidated. Unsurprisingly, the internet is full of questions regarding small business insurance. The team here at Gild spent some time combing the internet trying to find some of the most common questions you and other business owners have. So let’s get you some answers!

Q: What determines insurance premiums for small business insurance?

A: The more risks associated with your business (in the eyes of the insurance carrier), the higher your premiums will be. Generally speaking, four main variables determine how much you will pay for your insurance.  

  • The number of employees you have and the revenue size of your company.  
  • The value of the assets you wish to insure.
  • The specific risks associated with your business.  

Q: Does general liability insurance cover all risks associated with running my business? 

A: While general liability insurance protects against some of the most common risks associated with running a business, it is in no way comprehensive. It covers things like physical injuries to others, damage to others’ property, or advertising injuries. At the same time, damage to your property, injuries to your employees, or professional services and advice are not covered.  

When you’re first starting your business, general liability insurance may suffice for your needs. But as your business grows, you’re probably going to want to look at something more comprehensive such as a BOP or business owner’s policy. For more information regarding why business insurance may be the missing piece to your growth plan click here

Q: How do I prove I have insurance? How do I show my landlord, for example?  

A: In order to show potential business partners or clients that you have insurance, the simplest thing to do is produce a certificate of insurance (COI). If you drive a vehicle and pay insurance on it, you already have experience with certificates of insurance (COI) in the form of your insurance cards.  

Regarding your small business, certificates of insurance (COI) function basically the same way. The only difference is that to obtain your certificate, you may need to call your agent and explain that you have a client requesting proof of insurance. Your broker will send a certificate of insurance (COI) to you, at which point you can send it to your client or business partner.  

Requesting your COI is easy with Gild Insurance just contact us!

Q: Should I include insurance in my yearly budget or growth plan?

A: Absolutely! Insurance is something that is going to be with your business for the long haul, and you will need to scale it accordingly as your business continues to grow. The important thing to remember is that business insurance isn’t just about being covered in the event of a catastrophic event.

While accident protection is an aspect of business insurance, another part directly relates to scalability. If you don’t have proper business insurance, you’ll limit your business’s capacity for growth. Landlords and other outside parties look at business insurance as an indicator that the business owner is reliable and trustworthy.

Q: Do I need business insurance to secure a loan? 

A: If you’re looking to secure a loan from the Small Business Administration, you will need to show proof of proper insurance before you’re granted a loan. The insurance coverages you need will vary depending on your business and the associated risks, and you may need to show proof of several types of insurance before securing funds.

This is to be expected, of course, because loans are meant to be repaid. If the lender doesn’t feel confident that you’re operating a business capable of generating the revenue to pay back the loan, they will be less willing to lend you the money. In general, having comprehensive business insurance is a great way to show lenders and other business partners that you are a trustworthy business worthy of partnering with.

Q: Will outside factors—such as the crime rate in the area where my business is located—affect how much I have to pay?  

A: As mentioned above, whatever your insurance carrier uses to gauge their associated risks determines how much the insurance will cost you. Remember, business insurance is a for-profit business, and it’s only natural that your insurance company wants to safeguard itself from suffering any losses.  If you want to know what specific factors are driving your premium prices, the only thing you can do is ask an agent.

Q: Will my homeowner’s insurance cover me if I run my business from my home?

A: It depends, but usually, the coverage afforded to you by homeowners’ insurance will be insignificant compared to what you’d need to protect your business. For example, many standard home insurance policies only cover up to $2,500 worth of business property. If your business sells goods or products you ship from your home, chances are you’ll have well over $2,500 worth of inventory in your home.

Q: What’s the deal with worker’s compensation insurance? How do I get it?

A: Worker’s compensation insurance ensures that your employees will be covered in the event of illness or injury that occurs in the course of their employment. Because workers’ compensation insurance is required by law, it’s on the radar of almost all small business owners.  

What’s confusing about worker’s compensation insurance is that the legal requirements to have it vary from state to state. This also includes how businesses go about getting it in the first place.

Q: What’s the best way to find insurance?

A: While insurance agents are a tried and true method for finding the most comprehensive insurance coverage, thanks to the rise of recent technological advances, you can now also get quick quotes online through insurance aggregator platforms.

That’s where Gild Insurance comes into the picture. We focus on digitally delivering insurance explicitly designed for small businesses while using the latest technology, including real-time bind capabilities and digital assistant functionality. 

If you need help navigating the world of small business insurance, remember that help is always just a click away. We can help you find the insurance options that fit your business. If you have questions or simply want more info, reach on out! The Gild Team, along with Gildber the husky, are always standing by, ready to help.

Sources

Kilroy, Ashley. “Home-Based Business Insurance Explained.” Forbes. 2 Nov 2023. Accessed 13 Dec 2023. https://www.forbes.com/advisor/homeowners-insurance/home-based-business-insurance/

The content provided on this site is solely informational and does not replace legal, professional, or regulatory advice.