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What to Look for in Your Business Insurance Policy
Know what coverage you need before you sign on the dotted line

When starting a small business, finding the right insurance policy is one of the most important parts of the startup process. Not only do you need to protect your assets, you need to look after every other part of your business, too. Your business may need additional coverage based on individual circumstances, but all small business owners should learn about these important insurance policies.

General liability insurance

As the core policy for your small business, general liability insurance is designed to protect you and your business from a variety of different circumstances. These policies often include coverage for injury, property damages and lawyer costs in the event of a lawsuit, to name a few things. According to Caron Beesley, a contributor for the U.S. Small Business Administration, general liability insurance can be customized to meet your business’ needs: “General liability insurance is often sold as a catch-all and includes numerous add-ons that you can tailor to your business and its degree of risk.”

Beesley also explains that obtaining general liability insurance should be one of your first steps as a small business owner. Many clients will request proof of your insurance before beginning any professional relationship with your company, so it’s important to have the policy on hand.

Umbrella insurance policy

If your small business is a high-risk endeavor, consider an umbrella policy. According to Jack Hungelmann at, an umbrella policy allows business owners to receive additional coverage if your costs exceed traditional insurance policies.

Hungelmann also explains that there are three primary advantages to an umbrella policy: additional lawsuit coverage, additional defense cost coverage and liability coverage for lawsuits outside of your general policy’s coverage. “You can’t be overinsured for lawsuits,” Hungelmann claims. “You can’t go back and buy more later, if and when you need to use it.”

Property insurance

Many small business owners begin by working out of their homes. However, as your business grows, you may find yourself and your company in a small office setting. Both situations warrant the need for property insurance. This insurance policy may be lumped into your general insurance policy, but not always, so be sure you check your policy’s coverage before purchasing additional insurance.

According to Newtek, a business contributor for, property insurance covers more than just your office building or home office. This insurance policy can cover anything in the building used for business purposes. This includes computers and technology, inventory and more. These policies not only cover natural events like fire or flooding, but they are there to replace your items in the event of theft, vandalism or any other damages.

The location of your workplace will help determine the level of property insurance you will need. If you live or work in an area subject to natural disasters, including floods, earthquakes and fires, consider purchasing additional property insurance to protect your assets from those disasters.

Insurance is an essential part of any business. As you begin your search for coverage of your new small business, consider these policies and weigh the pros and cons of your own circumstances.

Published by East Boston Savings Bank
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All content contained in this newsletter is for informational purposes only and should not be relied upon to make any financial, accounting, tax, legal or other related decisions. Each person must consider his or her objectives, risk tolerances and level of comfort when making financial decisions and should consult a competent professional advisor prior to making any such decisions. Any opinions expressed through the content in this newsletter are the opinions of the particular author only.  

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