How To Choose the Right Insurance for Your Small Business


We often have clients ask about what kind of insurance they need – often the answer is that they must speak with a trusted business insurance company.  Please enjoy this special “guest post” from Gonzalez Insurance!

According to data collected by the Bureau of Labor Statistics, approximately 20% of businesses that opened in 2021 were not able to celebrate even their first anniversaries. The sad truth of business is that many ventures fail. Failure can occur for a variety of reasons, including an inability to scale up, a lack of sales, or not being able to compete in the market. To stay relevant for the consumers, extensive background research, cash flow, and investor support are required. Even when all checkpoints are marked, some businesses struggle to absorb the financial turmoil.

Small businesses boost the economy and increase employment. They play an important role in the value chain. In 2022, small businesses employed over 61.7 million people, accounting for 46.4% of all workers in the United States. This figure demonstrates how critical it is for small businesses to thrive and survive in difficult times.

When it comes to thriving and surviving, one of the most integral factors guiding the sustenance of small businesses is insurance. The pandemic, natural disasters, and mob violence have demonstrated the importance of being prepared in unforeseen circumstances and how having the right insurance can save a small business from going bankrupt.

Insurance Needs: Where Should the Focus Be?

Every industry has its own set of challenges and requirements for how and when to protect businesses from being physically or financially harmed. Every small business owner should concentrate on finding loopholes through superior portfolio analysis and crisis management. Here are some considerations to make before agreeing to any insurance coverage.

Factors Associated with Insurance Coverage


A car washing factory is subject to different risks than a bakery. Both businesses have unique setups, requirements, and risks. The industry is always the first step in understanding what type of insurance coverage is required, what it can cover, and how to protect assets or manage liabilities.



A service-based business and a product-based business have very different customer bases. However, both are risky in terms of potential lawsuits if the service or product causes harm to the user. If a company sells car parts and the faulty part causes an accident, the company should be willing to compensate the complainant. A business requires insurance policies to cover such liabilities.



Some businesses accommodate extensive manufacturing procedures. Manufacturers of harsh chemicals are frequently exposed to hazardous residues, which can endanger production line workers. These chemicals pose both health and environmental risks. Small business owners must remain alert and insured against any such damage with the help of appropriate insurance coverage.



Another vital factor to consider is the small business’s location. Natural disasters are frequent in the United States, and if commercial property is in one of these areas, proper evaluation is required to protect the business from losses. States such as California, Florida, and Texas, among others, are prone to such natural disasters, and small business owners may require additional protection coverage to oversee such damages.


The Right Insurance Coverage

Business Interruption Insurance

Natural or man-made disasters can force a company’s operations to halt for an extended period of time or even permanently. In such cases, small business owners should consider purchasing business interruption insurance. Because cash flow is often low when starting a business, this type of insurance is ideal for avoiding large financial losses.

A business interruption insurance policy assists small businesses in covering all lost revenue during halted operations, such as during a flood-like scenario. Business interruption insurance covers all types of permanent costs that a small business must bear, such as salaries, building rent, and loan amounts.


If a small business is forced to relocate its operations to a temporary location for any reason, the movement and setup costs can be covered by this insurance policy. The premium is determined by the small business’s location, industry, and size.


Liability Insurance

Businesses come with a multitude of liabilities that owners must manage. These can be related to operational hazards for workers, product failures for customers, or visitor risks. If the griever decides to seek compensation for the damages caused, the business is obligated to pay that.

A liability insurance policy is an excellent and necessary insurance policy for all small business owners. This type of insurance can also be subdivided based on the needs of the business, for example, general liability insurance, cyber liability insurance, or professional liability insurance. All these insurances aid in the payment or coverage of damages similar to those mentioned above. A small business owner can pay for legal fees, compensation, and other expenses with the help of the right liability coverage.


Commercial Property and Auto Insurance

A small business owner may operate in their own building or in a rented warehouse, and the business operations might even need a commercial vehicle. All these assets require comprehensive protection for a variety of reasons. If a commercial vehicle is involved in an accident, commercial auto insurance can help pay for the damages. Similarly, commercial property insurance can assist in compensating for any damage to the building, workers, valuables, etc.

A small business owner can protect not only the land but also the assets with commercial property insurance. So, if there is a malfunction or accident on the property, the insurance policy will assist in completely rebuilding the structure or paying for the repair work.

Commercial auto insurance can assist with legal settlements and healthcare requirements for either the driver/worker or those injured in the accident. Both of these coverages necessitate a thorough risk assessment based on a variety of factors.

How Can We Help?

Gonzalez Insurance, as a small business, understands all of the fundamental and intricate nuances of identifying and purchasing the right insurance policies. We can assist you in conducting a thorough risk assessment and selecting the appropriate insurance policy for your small business. So, if you are a small business owner who is having difficulty finding the right security coverage, get in touch with us.

(This blog, prepared by Gonzalez Insurance for use by Campanella Law Office, is for general informational purposes only and is not intended to convey specific legal advice or insurance advice, nor is it intended to create or constitute an attorney-client relationship.)


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