Are You Covered? A Quick Guide to Business Insurance for Small Businesses

When you're launching a business, your focus is on your product, your customers, and your growth. Thinking about insurance can feel like a distraction—an expense you'd rather put off. But think of it this way: insurance is the unseen foundation of your business. You don't notice it when it's there, but if it's missing when a crisis hits, the entire structure can collapse.

As a small business advisor, I consider a solid insurance strategy a core component of asset protection. Here's a straightforward guide to the types of insurance every new Massachusetts business owner should understand.

The "Non-Negotiables" for MA Businesses

1. General Liability (GL) Insurance: This is the bedrock of business protection. It covers you if your business operations lead to bodily injury or property damage to a third party.

• Real-World Example: A customer walks into your Mansfield retail shop, slips on a wet floor, and breaks their arm. Your GL policy would cover their medical bills and your legal defense if they sue.

2. Workers' Compensation Insurance: If you have employees in Massachusetts (even just one, full-time or part-time), the law says you must have workers' comp. There are very few exceptions. It covers medical expenses and lost wages for employees who are injured on the job. The penalties for not having it are severe.

Insurance You Should Strongly Consider

3. Professional Liability Insurance (E&O): If you provide services or advice for a living (think consultants, designers, accountants, architects), this is essential. Also known as "Errors & Omissions" insurance, it protects you from claims of negligence or mistakes that cause financial harm to a client.

4. Cyber Liability Insurance: In today's world, this is becoming a must-have. If you store any customer data digitally—names, emails, credit card info—you're a target for a data breach. This insurance helps cover the immense costs of a breach, such as notifying customers, credit monitoring services, and legal fees.

5. Commercial Property Insurance: If you own or lease a physical space, or have valuable equipment, tools, or inventory, this is critical. It protects your physical assets against events like fire, theft, or storm damage.

Where Do I Start?

The best first step is to speak with an independent insurance broker. They can assess your specific business risks and shop around for policies from different carriers to find the best fit and value for you. Remember, many client contracts will also require you to carry specific types of insurance.

Protecting the business you're working so hard to build is our priority at Somnium Advisory. We can help you understand the insurance requirements within your contracts and ensure your legal strategy includes this vital layer of protection. But note: Somnium Advisory is not an insurance agent and does not (a) solicit or recommend any insurance products; (b) offer specific coverage or policy advice; (c) discuss insurance policy terms or pricing.