Matching business insurance to the size of the entity.
The types and amount of insurance that you need for your small business vary considerably based on several factors. The type of business, your location, and if you have employees are some of the key details that insurers take into consideration when determining the right coverage for your needs. You can evaluate your insurance need by first considering the size of your business. Take a look at your number of employees, total sales, and earnings to start.
Typically, home-based businesses consist of one or no additional employees and have relatively little revenue. However, that doesn’t mean that they should go without insurance! While a home-based business is generally considered a small business, its location may require special attention to your insurance coverage. Homeowners insurance generally won’t cover you for business losses occurring in your home.
If you have 50 or fewer employees, you may consider yourself a small (but thriving!) business. A common small business insurance policy, called a BOP (Business Owners Policy), is usually available for those with fewer than 100 employees and revenues of up to about $5 million or less. While you can purchase customized insurance to cover your specific type of business, insurers offer standardized small business policies that protect against the most common risks.
Medium- to Large-Sized Businesses
For companies with more than 100 employees and revenues higher than $5 million, it’s important to protect it from the inside out. Growing businesses are great, but they’re also more exposed to certain risks. For this, specialized and additional insurance is worth adding on so that all departments, locations, and aspects of the business are covered.