Protecting Your Passion: Insurance Essentials for Small Businesses During Small Business Month
May is Small Business Month, a time to recognize the 33.2 million small businesses in the U.S. that make up 99.9% of all American businesses (SBA, 2024). While you celebrate your growth and impact, it’s also a smart time to evaluate your business insurance coverage — a critical yet often overlooked component of long-term success.
Without the right insurance, a single lawsuit, natural disaster, or cyber incident could derail everything you’ve built. Below, we break down the essential small business insurance types and share tips on how to optimize your coverage this month.
Why Insurance Is Essential for Small Businesses
According to The Hartford, 40% of small businesses will likely file an insurance claim in the next 10 years. The risks are real — and expensive. For instance:
- The average cost of a customer injury or damage claim is $30,000
- A fire damage claim averages $35,000
- Cyberattacks cost small businesses an average of $200,000, according to CNBC
With margins tight and downtime costly, having the right insurance isn’t a luxury — it’s a necessity.
Top Insurance Policies Every Small Business Should Consider
1. General Liability Insurance
Covers bodily injury, property damage, and legal costs. It’s often the first policy small business owners purchase — and for good reason. Many commercial landlords and clients require it before doing business with you.
2. Commercial Property Insurance
Protects your building, inventory, tools, and equipment from theft, fire, and natural disasters. Even home-based businesses can benefit.
Tip: Combine general liability and property insurance in a Business Owner’s Policy (BOP) to save on premiums.
3. Workers’ Compensation Insurance
If you have employees, workers’ comp is legally required in most states. It covers medical expenses and lost wages for job-related injuries or illnesses.
4. Professional Liability Insurance (Errors & Omissions)
Service-based businesses — like consultants, designers, or IT professionals — need protection from lawsuits claiming negligence or unsatisfactory work.
5. Cyber Liability Insurance
With 43% of cyberattacks targeting small businesses (Verizon DBIR 2024), this coverage is now crucial. It covers data breaches, ransomware attacks, and even regulatory fines.
Industry-Specific Coverage Examples
- Retailers: Add product liability insurance
- Food businesses: Consider spoilage coverage and commercial auto
- Freelancers and home businesses: Supplement with a home-based business rider
- Construction and contractors: May need inland marine and builder’s risk insurance
Small Business Month Insurance Checklist
Take time this May to ensure you’re covered for what matters most:
✅ Audit your current coverage
✅ Update policies to reflect growth or changes
✅ Check compliance with federal and state requirements
✅ Compare rates and bundles to cut costs
✅ Contact your local insurance agent (that’s us) for tailored solutions
Conclusion
This Small Business Month, protect your hard-earned progress by making insurance a priority. Whether you’re just starting or scaling up, having the right insurance coverage can mean the difference between bouncing back and shutting down.
Need help figuring out what’s right for your business? Contact us and we can walk you through the insurance essentials for your small business!