Small Business Hazard Insurance

Protect Your Company with Small Business Hazard Insurance

Hazard insurance is important to protect your business from numerous unforeseen disasters.

Storefront of a business sits the morning after the fire. Find small business hazard insurance.

No matter how safe you believe your business is, it's still vulnerable to a number of different threats at any time. Without the right protection in place, your small business could face serious losses or even bankruptcy. That's why adding small business hazard insurance is critical to your company's success.

Fortunately an independent insurance agent can help you get equipped with the right small business hazard insurance for the job. They'll get you covered long before disaster ever strikes. But for starters, here's a deep dive into small business hazard insurance and what it's all about.

What Is Small Business Hazard Insurance?

Small business hazard insurance is a specific kind of small business insurance that protects your company's physical property from damage by various threats. Your small business's building, equipment, and sometimes inventory and contents are protected by small business hazard insurance. This coverage is also sometimes referred to as business property insurance.

Hazard insurance for a small business covers structures or equipment that's mortgaged by the business. The Small Business Administration (SBA) requires businesses to have hazard insurance before they can be granted a loan for their property. An independent insurance agent can easily set up your small business with all the hazard insurance it needs.

What Does Small Business Hazard Insurance Cover?

Hazard insurance for a small business provides a ton of critical protection for your company. Covered perils under standard small business hazard insurance include:

  • Natural disasters like snow, ice, lightning, wind, and hail
  • Fire
  • Explosions
  • Power surges
  • Theft and vandalism
  • Riots and civil unrest

Without the right protection under small business hazard insurance, your company would be vulnerable to property damage and monetary losses caused by any of these disasters. Fortunately an independent insurance agent can help you get equipped with the right hazard insurance to protect you.

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Business Hazard Insurance and Homeowners Insurance

While standard homeowners insurance bundles property protection and hazard coverage along with liability, these coverages come separately for businesses. Hazard protection under home insurance covers the home and additional structures like garages and sheds against listed disasters like fire, vandalism, etc. But even if you have home insurance and run a home-based business, you'll still need small business hazard insurance.

Small business hazard insurance protects your company's assets to an extent your homeowners insurance can't provide with its built-in limits in that category. No matter where your business is based, its physical property and structure need coverage against numerous common threats. Ask your independent insurance agent about adding business hazard insurance onto your homeowners policy if you run a home-based business.

Do I Need Hazard Insurance for My Small Business?

Though not mandatory by state law, your business is probably required to have hazard insurance by its mortgage lender at the very least. Even if hazard insurance isn't mandatory, it's a good idea to consider adding it to protect your business's assets and property from frequent risks that could be costly to pay for out of your own pocket. Without hazard insurance, your business could even face bankruptcy after a catastrophic loss.

What Coverages Do Mortgage Lenders Require to Obtain a Business Loan? 

Mortgage lenders often require businesses to have various insurance coverages before they can be granted a loan, because it decreases the potential risk to the mortgage lender in case of disaster. Mortgage lenders often require businesses to have the following coverages:

  • Hazard insurance: The SBA requires small businesses to have hazard insurance to protect their mortgage lenders against business losses that could occur from fire, natural disasters, theft, etc. 
  • Flood coverage: The SBA also often requires small businesses to be protected against natural floodwater damage with a flood insurance policy, since this coverage is excluded by normal business insurance.
  • Hurricane coverage: The SBA requires businesses to have protection from hurricanes under their business insurance policy or in the form of separate hurricane insurance. 
  • Earthquake coverage: The SBA, in some cases, may also require small businesses to be protected by earthquake insurance, depending on their location, since earthquakes are excluded by standard business insurance.

An independent insurance agent can help your small business get set up with each type of coverage required to get a loan from a mortgage lender. 

How Do I Get Business Hazard Insurance?

Fortunately buying small business hazard insurance can be accomplished in just a few easy steps. Knowing this simple process can add extra incentive to cover your company with the right policy.

The Four Simple Steps to Buying Business Hazard Insurance:

  1. Analyze your unique business's threats: Consider your small business's location, operations, customer base, etc. After assessing your company's most likely threats, you can then create a policy that works best for you.
  2. Match with an independent insurance agent: Working with an independent insurance agent is the best way to get your small business the coverage it really needs on every front. They can recommend the right small business hazard insurance from a reliable and affordable carrier.
  3. Compare quotes: Your independent insurance agent can help by shopping multiple insurance companies and comparing several different quotes for you. They'll help you find the policy at the right price that also gets the job done.
  4. Review your coverage annually: Your business's needs will change over time, as will its specific risks. With the help of your independent agent, you can ensure that your small business keeps the right hazard coverage that grows with you along the way.

If you're still unsure of what your unique business's threats are that need protecting, your independent insurance agent can also help you analyze these potential disasters and choose coverage accordingly. 

The Growing Importance of Hazard Insurance and SBA Loans

The global coronavirus, or the COVID-19 pandemic, has impacted businesses of all kinds across the world, including millions of small businesses. Thanks to the SBA, financial relief for small businesses has been provided in the form of economic injury disaster loans (EIDL). These loans are designed to help small businesses recoup from revenue lost due to the pandemic. 

Your small business may qualify for an EIDL if its funds were temporarily impacted by COVID-19. Your independent insurance agent can help you find out for sure. 

The Best Small Business Hazard Insurance Companies

Small business hazard insurance is available from many different carriers. However, finding coverage will depend on your specific location as well as your business's operations and more. While an independent insurance agent is a great ally in helping you find the right coverage, you can start by reviewing our top picks for small business hazard insurance: 

Top Small Business Hazard Insurance Company Star Rating
The Hartford
5 star rating
Travelers
5 star rating
Progressive
5 star rating
Hiscox
Nationwide
5 star rating
Liberty Mutual
4.5/5 star rating

Frequently Asked Questions about Small Business Hazard Insurance

The cost of hazard insurance for a business will depend on a number of factors, including your business's:

  • Size
  • Location
  • Annual revenue
  • Operations
  • Risk-level

However, the median cost of hazard insurance for small businesses runs between $53 and $63 monthly. An independent insurance agent can help you find exact quotes for small business hazard insurance in your area. 

Yes, the SBA requires businesses to have hazard insurance before they can get approved for a loan because it decreases the potential risk to the mortgage lender in case of disaster. 

The SBA requires your small business to have hazard insurance of at least 80% of your loan amount. 

The SBA requires your business to have hazard insurance to protect its physical property, assets, and contents from various types of perils, including:

  • Natural disasters like snow, ice, lightning, wind, and hail
  • Fire
  • Explosions
  • Power surges
  • Theft and vandalism
  • Riots and civil commotions

An independent insurance agent can help you get set up with the right type of hazard insurance to be approved for an SBA loan.

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Save on Hazard Insurance for Your Small Business

Our independent agents shop around to find you the best coverage.

Why Choose an Independent Agent?

It’s simple. Independent insurance agents simplify the process by shopping and comparing insurance quotes for you. Not only that, but they’ll also cut the jargon and clarify the fine print so you know exactly what you’re getting.

Independent insurance agents also have access to multiple insurance companies, ultimately finding you the best small business hazard coverage, accessibility, and competitive pricing while working for you.

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TrustedChoice.com Article | Reviewed by Jeffrey Green

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https://www.sba.gov/sites/default/files/resource_files/CA_16332_Amend-1-Fact_Sheet_COVID_Gov_Cert_EIDL.pdf