The Entrepreneur's Small Business Insurance Types: What You Need to Know at Every Stage

You've been building your company for the past few years. Then a client's contract lands on your desk requiring specific insurance coverages you've never even heard of. Sound familiar? This is the "oh crap" moment that eventually hits most entrepreneurs. But it doesn't have to be you. 

We sat down with Jay Mueller, CEO of Camargo Insurance and EO Cincinnati board member,  to explore the most important small business insurance types. He's been in the industry for 20 years and has watched many business owners navigate the world of business insurance. 

His key insight? The moment the idea enters your brain that you might need insurance, you should have somebody look at the entire picture. 

Start With the Foundation: Core Coverage Areas

Whether your company is a business of one or 1,000+, you need insurance. Every conversation about small business insurance types, like the one with Jay, starts with the essentials. The first policy to consider: general liability insurance, which protects against third-party lawsuits, slip-and-fall accidents and property damage claims. Typically, this type of insurance is fairly inexpensive for most businesses. It's vital to any business as it appears in virtually every contract you'll encounter.  

Property insurance is also a basic insurance every business needs. The costs of it will vary dramatically based on what it is you do. For example, a marketing firm needs protection for computers and furniture, while a restaurant might require coverage for kitchen equipment and potential business income losses from disasters.

Lastly, workers' compensation rounds out the insurance foundation, protecting your employees and meeting state requirements.

The Hidden Risk: Cyber Insurance

When it comes to small business insurance types, Jay says there's one crucial piece most business owners are missing: cyber insurance. It's the largest coverage gap we are seeing today as cyber attacks increase in frequency and expense. You may think you're safe as a small business that doesn't have much important information. 

Unfortunately, you do, whether it's your intellectual property or your employees’ Social Security numbers or other personal information. Restaurants handle customers' payment data daily. Construction companies manage sensitive project information and client information. The coverage isn't well understood by many insurance agents either, making it crucial to work with advisors who can explain exactly what's covered and what isn't.

Avoid the Online Insurance Trap

When you first started your business, did you purchase basic coverage online? Many business owners do this, and it's fine for a while. However, as you grow, this insurance becomes inadequate. As a business owner, you can often secure proper coverage for the same cost as the online insurance. 

When discussing small business insurance types, Jay wants business owners to know that the perception of "online equals affordable" often keeps them from getting the coverage they really need. An agent can also help ensure you have the right coverage, both in terms of amount and what's legally required in your area. 

Check out a few different agents, see what their business focus is, read reviews and if you're a member of the Entrepreneur's Organization, ask your group for recommendations. 

Reframe Your Perspective

Managing expenses is a challenge for every growing organization, which often puts insurance on the chopping block. But before you do this, consider this question: Would you skip homeowner's insurance on your family's largest investment? Insurance empowers bold business decisions by providing you with security while investing in growth.

While it may seem like a waste of money if you don't use it, successful entrepreneurs understand that proper coverage isn't an expense but protection. That protection enables confident decision-making. Whether expanding to new locations or building teams, insurance provides the foundation for taking calculated risks.  

Take Action Before the Triggering Event

Don't wait for contract requirements, valuation milestones or worse, a disaster to force your hand. Start conversations with qualified advisors early in your business. They can present options and guidance while allowing you to make executive decisions about coverage levels that fit your budget and risk tolerance. 

Your business deserves protection that grows with you. Start building that foundation today. 

Visit Camargo Insurance to learn more about their insurance products. 

Connect With Fellow Entrepreneurs

Navigating anything from insurance decisions or other business conundrums becomes easier when you're part of a community of people who have been there before. EO brings together entrepreneurs at every stage who understand the unique challenges of building and protecting a business. 

Ready to tap into this network? Learn more about joining EO and connecting with entrepreneurs who support each other's growth in business and life.