If you run a small business, you’re well aware of how many things can go wrong. Even if they haven’t happened to you personally, you’ve probably heard the horror stories. Whether accidental customer injuries, legal action from competitors or any of a thousand other heartburn-inducing scenarios, the risks and pitfalls of running even a very small enterprise can keep you up at night.

One of the most effective ways to protect your business from potential financial loss is with general liability insurance. Let’s explore how this kind of coverage helps keep small business owners confidently on track to success.

What Is General Liability Insurance

Also known as commercial general liability insurance, general liability insurance protects businesses from financial loss arising from claims of damage or injury caused directly or indirectly by your business operations. It can help cover the costs of legal fees, medical expenses and lawsuit damages from incidents that are not intentional in origin.

General liability insurance typically covers several key areas, including:

Bodily Injury

In the unfortunate event that a customer is injured on your business premises or as a result of your business activity, general liability insurance can help cover the costs of damages, medical expenses and legal fees. For example, a customer could be struck by ice falling from a business’s roof.

Property Damage

If a customer or client’s property is damaged as a result of your business activity, general liability insurance can help with the costs of repairs or replacement. For example, if you own a landscaping business and one of your employees accidentally damages a customer’s driveway property while providing service.

Personal Injury

Personal injury of a nonphysical nature to a third party—such as false advertising, libel or slander that results in financial loss—can be covered by general liability insurance. For example, a customer could claim that a business’s advertising materials contain misleading claims that resulted in the customer experiencing financial loss.

Advertising Injury

Copyright infringement or violation of intellectual property rights related to your business’s advertising or promotional materials can also be covered by general liability insurance. For example, an advertisement might accidentally include copyrighted material for which the owner seeks compensation.

Without adequate insurance coverage, a business could be severely impaired—or even bankrupted—when held financially responsible for harm arising from occurrences such as these.

What Coverage Does a Small Business Need?

As you can see, selecting the right general liability insurance can be a game changer for a small business. The amount of coverage your business needs will depend on several factors, including the size of your business, the industry you’re in and the specific risks your business faces.

But let’s not forget: There are other types of liability insurance, and these coverages can make a big difference when you need it. These include:

Umbrella Insurance

This type of policy provides additional liability coverage beyond the limits of your general liability policy.

Cyber Insurance

This covers financial losses resulting from data breaches, cyberattacks and other digital threats. In the age of advanced digital hazards, this kind of insurance is increasingly popular among business owners eager to protect themselves from rapidly evolving threats.

Product Liability Insurance

This covers claims of injury or property damage resulting from a defective product your business sells or manufactures.

Employment Practices Liability Coverage

An employment practices liability policy helps protect business owners against claims from a customer, client, or vendor alleging discrimination, wrongful termination, harassment (including sexual harassment), or other wrongful employment acts.

Most business owners have insurance to protect buildings, vehicles and other important assets, but few consider insuring their greatest asset: their people.

How would your business manage after the death of, say, your lead salesperson, your sole design engineer or your experienced plant manager? How long would it take to fill that position or get someone else up to speed on their projects? How much damage would the loss of a key person cost you financially?

Key Person coverage is a type of life insurance designed to help your business recover from the loss of a person whose role is critical to your success. It’s particularly beneficial to small business owners.

“Many small businesses are started by one or two people and others are added over time to fill skill gaps,” said Derek Holmes, life insurance product manager at Erie Insurance. “Often, the key employees have different strengths than the owner, so replacing those skills and maintaining productivity after a sudden death puts a lot of pressure on the business owner and the business overall. Key Person life insurance can offer some relief.”

Imagine Your Business Without …

“Key persons” can be anyone in your business whose roles, knowledge or performance have a direct effect on the bottom line of the business.

To understand the magnitude of the loss of one of your key people, try this exercise:

• Make a roster of the leaders of each of your company’s departments – sales, operations, finance, information technology, engineering, etc.
• Document each person’s financial impact on your company’s monthly and annual revenue. For some roles, like sales, the financial contributions are easy to track; for others, think in terms of the financial effects of efficiency, intellectual property and other value they add. Assign dollar figures to these contributions.
• Capture the estimated time it would take to find a replacement for that position and train them to an acceptable level of performance. Is it days, weeks, months or years? Time is money.

By quantifying the value that these leaders bring to your organization, you will gain an objective view of the risks that exist and the extent of Key Person coverage you may want to consider.

Funds from a Key Person claim can help reduce some of the financial burden of a personnel loss. If the business fails as a result of the death, the Key Person funds can be used to cover other employee severance, pay outstanding bills or provide a buffer as the business owner transitions to a new endeavor.

Does Key Person Coverage Come ‘Standard?’

Because Key Person coverage is a form of life insurance, business owners have options.

Term insurance might be ideal to cover a key person who is older and may be closer to retirement. A 10-year term policy may provide adequate coverage as you work to identify a successor.

For younger key people, you may want to consider whole life insurance, which can extend for multiple decades and sometimes at higher benefit levels.

By talking to an Erie Insurance agent, you may discover additional combinations to match your business needs, such as Guaranteed Insurability Option riders, which allows for purchase of additional coverage regardless of changes in their health.

“During your next commercial insurance review with your ERIE agent, talk about business continuation and Key Person coverage,” said Derek. “You’ve worked hard to build your business – it’s important to take the necessary steps to have insurance in place to keep it going.”

Enjoy the feeling of a future that’s well-planned and protected. Speak with a local ERIE agent today to learn more about Key Person coverage and other business continuation options.

From your favorite lunch spot to that funky art gallery, our local small businesses are a beloved part of what make our hometowns feel like home. We rely on them daily – and they need us, too. If you’ve got a little extra to spare these days, here’s how you can help out your local small businesses.

How to Support Local Businesses Anytime of Year

1. Buy local whenever you can. When it comes time to stock up on pantry staples, think about supporting that mom-and-pop shop first. The American Independent Business Alliance (AMIBA) has fascinating data about how locally owned businesses generate larger “local economic multipliers.” Your support might make a bigger impact than you think.
2. Order takeout or delivery from your favorite local restaurants. Extra perk: No dishes.
3. Buy gifts for friends or family. Is it crazy to think about starting your holiday shopping in the spring? You’ll thank yourself later – and, hey, it’s something to pass the time! (Read our list of tips for safe online holiday shopping.)
4. Leave a generous tip. Servers and bartenders rely on tips. If you have it to spare, throw a few extra dollars their way. (And don’t forget to tip the delivery driver!)
5. Buy merch or other gear. We get it – you can only order so much takeout, especially if you’re not getting your usual number of steps in. Think about buying a coffee mug, T-shirt or ball cap to show some local love.
6. Buy some cool art. Websites like Etsy make it easy to search by location and find artists in your community. Some local artists might be doing “draw-alongs” or other livestreams. Add them to the list of folks who would appreciate a digital tip, too. (Keeping the kiddos occupied with art projects of their own? Read our list of 5 stylish ways to display children’s artwork.)
7. Leave a positive review. If you’re short on cash, boosting a local place’s reputation is worth its weight in gold. While you’re at home, type up a couple good comments for your favorite spots to leave on social media or search engines.
8. Check with your local chamber of commerce or small business association. Local groups might be planning events, discounts, or promotions unique to your area. Get connected and see what’s happening in your neighborhood.
9. Pay it forward. If you’re fortunate to have some steady cash flow right now, remember that others might not. Consider treating the next person in line behind you – or making a donation to a charity that helps the less fortunate in your community.
10. Buy gift cards or gift certificates. Stock up now and treat yourself to a night on the town. For places you rely on regularly – for example, your hair salon – buy an extra service or two now if you can, since you know for sure you’ll use it in the months ahead.

Flashy commercials. Doorbuster deals. It’s holiday shopping season again – and if you own a local business, competition from big box stores can be fierce.

According to a recent survey from McKinsey & Company, 85% of consumers plan to purchase at least one item in store despite the prevalence of online shopping. And even better, Forbes says 84% of consumers plan to visit a small business they’ve never purchased from this holiday season.

Whether you’re a retailer, service provider or B2B – the first step is making your business top of mind.

Holiday Shopping Promotional Ideas for Local Businesses

Need inspiration? Here’s how to get people to think of your business when they shop local for the holidays.

Discounts, Deals and Giveaways

• Offer a coupon: Your customers won’t expect you to slash prices like the big box stores, but a modest percent-off can be a smart gesture to get folks in the door.
• Donation discount: Offer a coupon, bonus gift or free upgrade for customers who bring in an item to donate to a charity of your choice.
• Gift card promotion: Perfect for stocking stuffers! Offer a free gift card in a smaller amount for those who buy a larger one – say, a free $10 card for every $50 in gift cards purchased, or $25 for every $100.
• Ask for referrals: Have your satisfied customers do the word-of-mouth marketing for you. Reach out to your customer list via email, text or phone. Then, offer a limited-time, special holiday rate for those who buy or book with you by referral.
• Host a contest: Everyone loves winning prizes! Host a fun and interactive promotion to win a gift basket, free service or cash prize. Whether it’s 12 days of trivia; guess the gumdrops in the jar; or a holiday decorating photo contest – get creative, and get your customers involved.
• Start a loyalty program: Launch a punch card or points system to reward customers who keep coming back. Even after the holidays are over, they can reap rewards all year long.

Go Digital

• Website, local listings and social media: Don’t forget the basics! Make sure your overall digital presence reflects any changes in hours, services or ongoing promotions for the holidays.
• Use relevant hashtags: Hashtags make your social media posts more visible by joining a larger conversation. National “buy local” campaigns include #ShopSmall and #SmallBizSat. See if your local city, chamber of commerce or shopping plaza has a hashtag for local conversations, too.

Spread Holiday Cheer

• Send holiday greetings: Reach out to current customers or prospects on your contact list with a festive postcard, greeting card or e-card to stay top of mind.
• Make your products gift-able: Package your best-selling products into ready-made baskets for easy gifting. Couple that with a “gift guide” roundup highlighting products on your website or social media. Not a retailer? Offer gift cards or certificates for your services in festive packaging.
• Start a donation drive: Make your business a drop-off location for donations to a local food bank, animal shelter, Toys for Tots or other local charity. (Bonus: A donation drop-off makes for a great photo op or local news story after the fact, too.)

Think Local

• Buddy up: Double your reach by collaborating with another local shop. Get creative! For example – a restaurant could partner with a local florist to offer add-on arrangements for holiday takeout meals; or a day spa could sell a limited-edition scent of a locally made candle. Don’t be afraid to think outside your industry if you’re both marketing to a similar clientele.
• Check with local leaders: See if you can tap into anything planned by your city or local chamber of commerce, such as special events or a local shopping guide.
• Host an event: Generate buzz with a sidewalk sale, holiday art show or light display.

As an entrepreneur, you’ve got a lot on your plate. Building your business plan. Securing funding. Setting sales goals. Finding new customers. Keeping track of your finances… The list goes on and on.

With so much to get done, chances are buying a business insurance policy isn’t high on your list. To make matters worse, it’s a common misconception that insuring your business isn’t really necessary when you’re just starting out.

But the truth is, every business needs insurance – even startups. It’s a simple step you can take to protect the company you’re working so hard to build. And it can cost less than you may think.

As an entrepreneur, you’ve got a lot on your plate. Building your business plan. Securing funding. Setting sales goals. Finding new customers. Keeping track of your finances… The list goes on and on.

With so much to get done, chances are buying a business insurance policy isn’t high on your list. To make matters worse, it’s a common misconception that insuring your business isn’t really necessary when you’re just starting out.

But the truth is, every business needs insurance – even startups. It’s a simple step you can take to protect the company you’re working so hard to build. And it can cost less than you may think.

To help you understand why business insurance is so important, here are answers to some of the most common questions about insuring a new business or startup.

Why Do I Need Business Insurance?

Like any type of insurance policy, business insurance is designed to help protect you against risk. And there’s no shortage of risks that businesses face – especially new businesses and startups. If you open a physical office or location, someone could file a lawsuit after getting injured on your property. If a client is unhappy with your work, they could sue you for negligence. Your product inventory could get damaged or stolen. Without the proper insurance coverage, your business would be on the hook for all of these unexpected expenses. And if you’re just starting out, that added cost could put you out of business entirely.

When Should I Buy Insurance for My New Business?

When your business is still in the early planning phases, there’s probably not much that needs protecting. But as your startup dreams turn into reality and you make your first sale, it’s wise to look into a business insurance policy. Business insurance can help protect against everything from property damage to liability claims from customers and employees. So, buying a policy early in the life of your business will offer the best protection from the start. Speaking of employees, as soon as you hire your first employee you’ll be legally required to carry workers’ compensation insurance. This insurance helps cover medical care and lost wages for an employee who is hurt at work.

Do I Need Business Insurance for a Home-Based Business?

If your business is starting out in your basement, home office or garage, you may think that business insurance is unnecessary. But just because you’re working out of your home doesn’t mean you’ll be covered by your homeowners insurance. Most homeowners and renters policies only go so far and aren’t designed to cover things like destroyed business inventory or customer injuries. For example, if you’re a photographer and your high-end camera equipment is damaged by a water leak, your homeowners coverage might be limited to $500 or $1,000 for equipment used exclusively for a business. And if a client trips down the stairs to your basement office, your homeowners policy wouldn’t cover a premises liability claim because they are a business client. Business insurance, owever, would protect you in both these instances – and more.

What Type of Business Insurance do I Need?

The type of insurance you need for your startup will largely depend on the specific business or industry you’re in. That’s why Erie Insurance offers business insurance packages that are tailored to your specific industry. But generally, you may want to consider:

• Commercial auto insurance: Whether you rely on a single car or a large fleet of vehicles, commercial auto insurance is something many businesses need. This coverage can protect your business against claims for bodily injury and property damage caused by a covered accident arising out of the use of a company vehicle.
• Commercial property insurance: Commercial property insurance helps protect the building or physical location you work in, whether it’s owned with property coverage or leased with liability coverage for damage that’s your fault. It could also replace damaged or stolen assets like equipment and product inventory. Some policies, like business interruption coverage, can even help recover any income you lost while your doors were closed due to a covered loss.
• General liability insurance: While specific liabilities may vary from business to business, a general liability policy protects you against covered claims alleging bodily injury or property damage.
• Employment Practices Liability (EPL): Legal issues stemming from alleged discrimination, wrongful termination and harassment are growing concerns for today’s small business owner. With EPL coverage from ERIE, you can choose the protection that best fits your needs to help cover the costs of a lawsuit – even if the charges aren’t true.
• Cyber Suite: Protection for cyber incidents isn’t just for large businesses. With Cyber Suite¹ from ERIE, you’ll be prepared to respond to a wide range of cyber incidents including breaches of personally identifying or sensitive information and threats that could jeopardize the safety of that information.
• Workers’ compensation insurance: Often referred to as workers’ comp, this policy is legally required in most states if you hire employees. It helps cover medical care and lost wages for an employee who is hurt at work and cannot return (not available in Ohio).
• Business umbrella policy: No matter how careful you or your employees are, mistakes and accidents, unfortunately, do happen. That’s why many business owners make the smart decision to protect themselves with extra business liability insurance. ERIE’s business umbrella is an additional layer of coverage that gives you extra protection and peace of mind above and beyond your commercial general liability, professional liability, business auto liability and employers liability insurance. (Check with your local ERIE agent about any sublimits that might apply.)

How do I Determine How Much Insurance Coverage I Need?

After figuring out what type of insurance you need, the next step is to decide how much coverage is enough to protect your growing business. Generally speaking, your coverage limits should match the level of risk your business will be exposed to. But that’s a difficult thing to figure out on your own. Fortunately, you can get customized advice from an ERIE agent in your neighborhood. As a member of your community, your local ERIE agent is uniquely positioned to understand the insurance needs of your business. They also know the risks associated with where you live, such as the local costs of construction and common claims.

How Can I Save Money on My Insurance Coverage?

Nearly every startup has one thing in common: money is tight. As a small business owner themselves, your local independent ERIE agent can help you find the right balance between price and protection. This process helps ensure that your policy provides all the coverage you need at a cost you can afford. Your ERIE agent can even help you take action to reduce risks in the first place with access to a risk control consultant. They’re a free resource to help you evaluate the potential risks your business faces and then recommend measures you can take to help reduce those risks – and potentially lower your premiums in the process.