3 Signs Your Small Business in Minnesota Needs Commercial Insurance  

When running a small business, making sure things are fully covered and protected can mean everything. Otherwise, all the progress and development that has been made can be completely derailed by legal claims and unexpected risks.

Over a ten-year period, studies have shown that more than 40% of small businesses will experience an insurance claim. At 40%, it’s hard to think any small business could not need commercial insurance, but here’s a small breakdown of reasons a small business can need commercial insurance and things to be aware of.

Breaking Down Risk Assessment

There are a number of key problems that commercial insurance can provide protection. These can fit into 3 different categories of signs to show that commercial insurance is necessary to running a small business. An operation may be on the smaller side, but that doesn’t mean there aren’t risks, threats, and liabilities that can greatly harm a stable business or hinder growth.

So if every small business can benefit from commercial insurance coverage, then why do these signs even matter? Well, when running a smaller business, it is important to not overextend where you don’t need to, and there needs to be a balance struck between being left exposed and vulnerable, and having a budget stretched too thin to achieve other goals. Understanding signs and reasons can help guide and inform an answer to one of the most important questions in running a business. “Is this really necessary or not?”

The real problem is that you just can’t foresee what will go wrong and what won’t. There is no forecasting risk. That being said, by understanding the risks, there can be some amount of probable risk assessment that can help guide this balancing act.

Experiencing Liability

Lawsuits and liabilities can change everything for a business. If a commercial location is involved, there is an automatic and inherent risk of customer injury. Adequate insurance is necessary to cover all costs associated with accidental injury taking place on an owned and/or operated commercial property. Any commercial property should be covered and often is required to be. Commercial General Liability coverage is designed to cover a business from losses associated with a responsibility for customer injury or suffering. If someone slips in a commercial building and breaks a leg, the business is often on the hook for covering medical expenses or covering lost wages or emotional distress. A CGL coverage plan will greatly or completely mitigate the costs of covering these liabilities.

This can cover damage or injury due to a commercial property, an employee, your products, and injuries taking place at an office, storefront, or facility. Depending on the policy, there may even be coverage for legal fees experienced in defending claims, as well as paying any reached claims.

Security Threats

Sometimes businesses require additional security measures. This can apply to a lot of things, but for some commercial enterprises, hiring private security can be a must to mitigate theft and safety concerns. Any hired security company or guards offering protection and loss prevention and safety services as a paid service should be covered with an adequate insurance program. Security can often be hired out to companies who will cover their services, but some businesses privately hire security services and they need to cover the claims associated with security needs.

Damage Or Loss

Wherever a business is being operated, the commercial property needs to be protected, along with the contents. Commercial property insurance will cover your physical property and all contained assets in the event of theft or damage. Risks for damage and theft always exist, though assessing the levels to which a company is being threatened by damage scenarios or theft can vary greatly. Things like fire damage and flooding are usually the culprits of the most expense, but theft is a very real concern as well. 20% of all small business insurance claims are due to theft or burglary, either by a customer or employee.

One important area of insurance that is important to remember is business interruption insurance. There are so many operation costs associated with running a commercial enterprise, so if anything happens that will disrupt business operations, a business can still be stuck with all the property fees and possible necessary operating costs such as refrigeration or power costs.

Commercial insurance covers damage scenarios such as fires, flooding, electrical issues, and more. If your commercial location contains valuable assets such as electronics, computers, equipment, and machinery, or product inventory, then this is a very clear sign that commercial property insurance is very necessary.

The type of coverage needed will reflect property sizes, contents insured, and locations. One of the biggest insurance mistakes a company can make is to under-insure. Think about everything. Vandalism can be a real problem too so it is important to consider all of this when deciding on Minnesota business insurance.