“Sometimes people say, ‘Oh I’m just a small business owner, I don’t have to worry about this,’” explains John E. Dustin, president and founder of J.E.D. Insurance. “But you do. Every small business has some kind of legal exposure, and if you get sued for anything, then you have to defend it.”
Insurance helps protect against any legal exposures from becoming a liability. Dustin gives the example of a small, one-person retail business with no employees and no brick-and-mortar store. You still likely have at least one major exposure: cyber liability. If you’re storing customers’ credit cards and personal information and your business has a security breach that leads to identity theft, you could be legally responsible. That’s just one example of a potential liability, and most businesses have many more they should consider.
If someone slips and falls on your property, you could be liable. If an employee gets in a car accident while driving on the job, you could be liable. And if one of your employees claims another employee harassed them, that could also lead to a lawsuit.
Defending a lawsuit, of course, is expensive.
“Many people don’t think about the fact that defense costs could wipe out your small business,” says Dustin. That’s where insurance comes in. It’s not just about having any insurance policy, but having the best policy for your particular business. A big insurance company might quickly sell you the cheapest plan possible, in an easy over-the-phone transaction. But a broker who takes the time to get to know your business and assess all liabilities is more likely to provide the plan that leaves you most protected.
“Small business owners need a broker who cares about them and educates them,” says Dustin. “Someone who is going to do a ground-up review of your business” — including coming to look at your worksites and seeing what the potential challenges are — “rather than doing it all over the phone in five minutes.”
Once you have that plan in place, it’s important to have a broker whom you know you can reach out to when you want to discuss any changes in your business. A new lease, a new contract or a new type of client might change what you need to be insured against. Even seemingly small tweaks to the way you operate could result in new insurance concerns.
“Let’s say you’re running a tire change shop,” says Dustin. “But then you start doing brakes, too. Many people might not consider the fact that brakes may not be covered under your existing insurance policy.”
Whatever kind of business you’re running, there is a range of insurance concerns. If you’re like most small business owners, you have enough on your plate already, and you’re not about to take the time to learn every intricacy of insurance law. That’s precisely why you need a good insurance broker on your team — someone who understands your line of work, knows relevant state laws and always has your best interests in mind.
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