Small Business Insurance 101

Small business insurance protects you and your business against lawsuits in the case of property damage, bodily injury, and more.

The Basics

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Who needs business insurance?

If your job comes with a level of physical risk, you already know that you need business insurance to cover you in case of an accident. But in some job settings, these types of accidents seem less likely, so what’s the harm in going uninsured?

Opting for small business insurance offers three main benefits:

1. It can get you more work.
Regardless of whether you think you need small business insurance, clients and business partners across industries often require proof of insurance from the people they contract. That means that if you want to get the best jobs, you have to have a Certificate of Insurance readily available.

2. It protects you from risk.
This is the obvious one when it comes to small business insurance. Purchasing a policy can protect you against financial risk associated with accidents on the job (more on that below).

3. It’s a badge of trust for your business.
Getting small business insurance is a major step in establishing your business. Just as you need a business license and a website to promote your services, obtaining insurance is another way to lay a strong foundation for your business. With Thimble, you can display our badge on your website, business cards, and marketing materials to show your customers that you mean business.

Even if you work in a seemingly “safe” industry, such as consulting, beauty, or freelance design, incidents that result in physical harm or property damage can happen. And beyond that, there are a variety of professional risks in any industry that can result in expensive lawsuits.

To illustrate what’s at stake, consider the average cost of common types of claims:

  • Customer injury or damage: $30,000
  • Customer slips and falls: $20,000
  • Customer struck by an object: $10,000

Do you have $20,000 to cover a third party’s medical bills or a lawsuit because of a freak slip & fall? If the answer is yes, then you can stop reading here. But if not, small business insurance is essential.

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What does business insurance cover?

In addition to the assurance against financial liability in the above scenarios, business insurance can also give you a leg up in pursuing new work opportunities. Not only do many clients and organizations require the businesses they work with to provide a Certificate of Insurance (a COI can be downloaded or sent to a client in seconds with Thimble!) —you may be required to purchase insurance coverage in order to maintain compliance with state or local regulations.

At the end of the day, purchasing small business insurance isn’t just about protecting yourself—it’s about growing a reputable business.

There are a number of different types of insurance available to small businesses but the most common, General Liability, covers three types of scenarios:

Bodily Injury: Applies to injuries sustained by third parties, including clients and bystanders, due to negligence. The policy is designed to cover expenses including medical bills, missed work, and legal costs associated with the accident.

Property Damage: Applies to third-party property damage. The policy will cover the cost of repairing or replacing the damaged property and any legal costs.

Personal and Advertising Injury: Applies when you are held liable for personal injury—which can include slander, malicious prosecution, copyright infringement, and more—to a third party. The policy will cover any costs associated with lawsuits or settlements against you. Here’s an example: a salon owner posts a photo of a customer on her social media account without obtaining her permission to do so, and the customer sues for violation of privacy.

Learn more about different types of small business insurance

Who does business insurance cover?

Now that you know what small business insurance covers, it’s important to know who is covered by your policy. As the primary policyholder, you are what’s known as the Named Insured. You can add two types of people or entities to your policy: crew and Additional Insureds.

Crew members can include employees or temp workers who are working with you on a job or project. By including them, you are extending your policy to cover their actions in the event of an incident like those outlined above. The ability to add crew members to your policy is unique to Thimble, and is not a standard feature of most small business insurance policies.

Additional Insureds, by contrast, are individuals or entities added to a liability policy as an insured in regard to a specific job, activity, or location. Generally, they have a business relationship with the Named Insured, and including them on your policy extends coverage to them if a claim or lawsuit is brought against them for an incident that results from your negligence.

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How do I get business insurance and how much does it cost?

Traditionally, insurance for small businesses could only be purchased on an annual basis, costing hundreds or even thousands of dollars per year. For most small businesses, this represented a significant financial burden that often kept them from growing and taking on new opportunities.

With Thimble, annual commitments are a thing of the past: coverage can be purchased down to the hour for a one-off project or by the day, week, or month. That means you only pay for what you need.

The cost of your policy will vary based on your industry and the duration of coverage, but the low price point and flexible policy options, both short-term and monthly, mean one thing: insurance doesn’t have to be a barrier to success. With Thimble, you can get covered in 60 seconds for any job that comes your way.

What happens if I have a claim?

Even though we offer a totally new insurance product, we’re underwritten by one of the best, most established companies in the business: Markel Insurance Company, a Fortune 500 company, A-Rated by A.M. Best for financial strength. They underwrite all of our General Liability policies and have a claims handling team that can’t be beat.

The process for submitting a claim is quick and easy—you’ll need to provide some basic information about yourself and the incident, and Markel will handle the rest. Markel strives to respond promptly to every submitted claim, and you can expect timely and transparent communication every step of the way while your claim is being processed.

Types of Coverage

What is General Liability insurance?

General Liability insurance, also known as Commercial General Liability insurance (CGL) or business liability insurance, protects businesses against the risk of unintentional accidents. These accidents fall into the categories of bodily injury, property damage, personal and advertising injury.

Learn more about General Liability

What is Professional Liability insurance?

Professional Liability insurance, also known as errors & omissions insurance, is designed to protect against claims relating to the inadequate performance of professional services. In other words, this coverage applies when someone alleges that you’ve done your job improperly.

Learn more about Professional Liability

What is Drone Liability insurance?

Drone Liability insurance is specifically designed for both commercial and recreational drone users. Like General Liability insurance, this insurance covers legal liability for bodily injury or property damage caused by a drone, as well as invasion of privacy.

Learn more about Drone Liability

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Coronavirus and your business

We know your small business has likely been impacted, so we've put together some resources that we think may be useful.