How Different Insurance Impacts Small Business Owners

A man and woman stand in a dimly lit flower shop and admire a large potted plant near a collection of purple slowers.

As a small business owner, you'd obviously much prefer to run your company than talk about insurance. But you need to be prepared for the moments you don't expect. Here are about some not-so-uncommon situations that you could face, and how insurance can protect your small business against financial disaster.

Expect the Best and Prepare for the Worst

There's no reason to think that bad things will happen to your business—and getting insurance is not about a feeling of impending dread. In the best case scenario, of course, you'll never have to cash in your policy. Rather, small business insurance is about preparation, and to make sure that you protect your livelihood and the livelihood of your loved ones.

Situation 1: You just waxed your floors… and someone slips and breaks their leg.

Although you were as careful as you possibly could be, a customer came into your store and slipped on a slick tile. Worse, they didn't have health insurance. Now, they're in the hospital, and even threatening to take legal action. Maybe you've heard this as an old wive's tale—does this really happen? Unfortunately, yes.

In this case, your general liability insurance may not be enough for the financial wallop that's coming your way. Umbrella insurance can help you get more coverage, so your bills and legal fees aren’t coming entirely out of pocket when they get super expensive.

Situation 2: You have a brand new production machine… and you have a major accident with it.

You've been waiting to upgrade the machinery in your fabrication plant for years. With the financing under your belt to do it, you have a shop full of new equipment—but it doesn't work the same way. You find this out after having an unfortunate accident with one of the machines that leaves you severely injured.

AD&D (accidental death and dismemberment) insurance isn’t fun to think about, but your business needs to keep going in case anything happens to you. If you pass away from your injuries or are no longer able to work due to the accident, your family will be covered financially.

Situation 3: You’ve just brought in beautiful new inventory… that gets heisted overnight.

Stocked with incredible new inventory, your new store redesign looks amazing. Regrettably, a criminal thinks so, too, taking everything they can fit into a few large bags and making it out before you even had a chance to know you were broken into.

Your general liability may help you out, but additional theft and crime insurance, or commercial property insurance, can make sure that you’re protected in the case of a robbery, burglary, or another event, and enable you to recoup compensation for stolen goods.

Situation 4: Your new product is now out on the open market… but a child swallows a piece and gets sick.

It's taken years, but your new product is finally out on the market. It's thrilling... until you start getting social media mentions that your product is actually dangerous for small children. You're now worried you might be sued in the event of something bad happening to one of your consumers before you can issue a recall.

Product liability insurance can protect your business in the case of harm resulting from one of the products you’ve manufactured. You may still have to pay out a claim if injury is sustained, but insurance can help you handle the financial blow.

How to Find the Right Small Business Insurance

You can't be sure of what’s coming your way, but what you can be sure of is that you don’t want to find out afterward that you’re not prepared for it. Part of being a strong business owner is being able to plan both short- and long term, and the right kind of small business insurance can protect your livelihood now and for generations to come.

The views expressed by the author are not necessarily those of Fifth Third Bank and are solely the opinions of the author. This article is for informational purposes only. It does not constitute the rendering of legal, accounting, or other professional services by Fifth Third Bank or any of their subsidiaries or affiliates, and are provided without any warranty whatsoever.