Small businesses in Arkansas are an important part of the state’s economy, with over 99% of the businesses classified as small firms. These businesses are the backbone of the state’s economic growth, providing opportunities for job creation and economic development. However, small businesses in Arkansas face many challenges, including financial risks, legal liabilities, and unexpected events that could potentially cause significant financial losses. For these reasons, small business insurance in Arkansas is essential and every business owner should consider investing in policies to protect themselves from possible financial risks.
Why Do Small Businesses in Arkansas Need Insurance?
No matter the industry, every business owner faces an array of potential risks. From property damage to employee injuries or illnesses, a single incident could cause a business to shut down permanently. Small business insurance is designed to protect business owners from these risks and losses incurred due to such events. For instance, if a small convenience store were to suffer a fire that destroyed the entire inventory and severely damaged the building, business insurance would cover repair costs or the loss of revenue while repairs and renovations are underway.
Additionally, small business insurance safeguards businesses in legal matters. For example, if a customer or employee made a claim that negatively impacted the business, such as personal injury or copyright violation, the right insurance policies would help cover legal expenses and damages.
The Main Types of Small Business Insurance in Arkansas
Small businesses require different types of insurance policies based on their specific operations and needs. The state requires workers’ compensation and unemployment insurance for businesses with employees; failure to comply could result in fines and legal consequences.
Beyond those mandatory policies, some other common types of small business insurance include:
- General Liability Insurance: this policy protects against third-party claims of bodily injury or property damage that arise during day-to-day business operations. It also provides financial support during legal proceedings related to these claims.
- Professional Liability Insurance: this type of insurance shields businesses offering professional services from potential lawsuits. Also known as errors and omissions, this policy is an essential safeguard for businesses in industries such as law, accounting, and consulting.
- Commercial Property Insurance: this policy protects physical assets, including buildings or any type of commercial real estate, equipment, inventory, or other property that allows a business to function on a day-to-day basis. Coverage can be structured to protect against a range of risk factors, from fire to theft.
How Much Does Small Business Insurance Cost in Arkansas?
Insurance costs for small businesses depend on the scope of the coverage required and the nature of the business itself. For instance, a business that operates in an industry with high injury risk may face higher workers’ compensation premiums than an accounting firm with low-risk jobs.
In Arkansas, the average cost of general liability insurance for small businesses is $700 per year, according to a national study. However, the actual cost for your business depends on multiple variables.
The size and location of your business also play important roles in determining costs. For example, businesses located in high-risk areas may need to pay more for insurance.
Are Businesses Required to Have Insurance in Arkansas?
Arkansas law requires companies with three or more employees to carry workers’ compensation insurance and make contributions to the state’s unemployment trust fund. Failure to comply with these requirements can result in severe consequences such as penalties and fines.
Although it is not legally required, most businesses benefit from purchasing additional insurance policies that safeguard against financial loss caused by potential lawsuits or other unforeseeable events.
Finding the Right Insurance Provider For Your Small Business
Being a small business owner in Arkansas, you understand the various difficulties and obstacles you need to overcome as an entrepreneur in the United States. From recruiting employees to overseeing daily operations and coping with financial limitations, it can be challenging to manage everything efficiently.
Thankfully, General Liability Insurance is an option that can help lessen these burdens and offer suitable insurance coverage that fits the requirements of your business. With our team of skilled professionals and years of experience, we make use of cutting-edge technology and our proficiency to provide you with exceptional insurance coverage.