How to Prepare for a Small Business Crisis

If a crisis occurs were to occur that threatens your business, you will need small business insurance that will minimize out of pocket costs. To do this you should purchase a business insurance policy to protect your small business. 

However, there are different types of business insurance that you can purchase that depends on the coverage that you need.

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Comprehensive General Liability

When your business conducts work with clients and customers it is subject to accidents. 

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You are able to be prepared for an accident that causes bodily injury or property damage by obtaining a general liability policy.

This insurance pays for damage that an employee causes to a person or property during work on the job. 

Damages are also paid by the policy if an accident is caused by a contractor that performs work at your property.

Workers’ Compensation

A workers’ compensation policy is used to cover injury to an employee. If you intend to hire employees for your small business, a workers’ compensation policy is required.

Most states have laws requiring all businesses that have employees to obtain a workers’ compensation policy. 

When an employee becomes injured on the job your workers’ compensation policy pays for medical care and rehabilitation.

Business Property

When you small business has property such as a building, inventory or equipment you need to obtain a business insurance policy. 

This type of policy will replace and repair damage to the building, inventory and equipment if you suffer a crisis due to flooding, a fire or natural disaster. 

You will typically require this type of policy to cover repair or replacement costs that would come out of your own pocket.

Business Credit

Clients that fail to pay their bills or refuses to accept delivery of your products is a crisis that costs your business money. 

You can easily prepare for these types of losses that are due to bankruptcy or insolvency of a client by obtaining business credit insurance.

This type of insurance can be used to cover a portfolio of all your business customers and their transactions. 

If you extend a line of credit to your clients, you can prepare for a future crisis with a business credit insurance policy.

Business Interruption

Insurance for business interruption will pay some of the costs for lost income when a crisis occurs. This coverage is available until your business is able to successfully recover. 

You typically use this coverage to cover expenses for continuing operations, lost profits based on financial statements and the costs that you may incur when you need a temporary location for your business.

Errors And Omissions

This is a type of business liability insurance for professionals that is designed to provide protection to a small business against a lawsuit. 

This coverage is separate from a general liability insurance policy and business property insurance.

If you are ever presented with a lawsuit that can harm your small business, you will be prepared with an errors and omissions insurance policy.


Analyze your risks to determine if you require any additional forms of small business insurance to prepare for any type of crisis that might arise. 

Contact a local insurance agent to see what types of policies that you have available. You and your insurance agent can then develop a plan to prepare for a small business crisis.

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