Any time you start a business, you’re inevitably courting risk. This risk may come from lawsuits, worker’s comp claims, or other forms of liability. One of the most effective ways to manage your risk exposure is by investing in the right insurance coverage. The question is, what level of coverage do you really need?

The answer may depend a little bit on your industry, but more than that, it depends on the size of your company. Indeed, as you assess your business insurance needs, one of the best places to start is by taking stock of how many employees you have.

Assessing Insurance Needs by Business Size

While there are no hard-and-fast rules here, there are a few basic size categories to consider.

Home-based Businesses

A lot of companies start in basements, attics, living rooms, or garages. The typical home-based business has modest revenues, and seldom more than one additional employee.

Even home-based businesses benefit from proper insurance protection, however. It’s particularly important for home-based entrepreneurs to note that their regular homeowner’s policy does not protect them against all types of liability and loss. It’s vital to take out additional coverage that encompasses any business activity that happens within the home.

Small Businesses

The small business designation is typically applied to companies with 50 employees or fewer. Meanwhile, the Small Business Administration highlights businesses that are organized for profit but not dominant within their field.

Small businesses require more robust insurance coverage than home-based businesses, including general liability as well as worker’s comp policies.

Medium-sized Businesses

A medium-sized business is usually defined as having between 51 and 1,000 employees, and revenues of anywhere from $10 million to $1 billion.

Naturally, businesses in this category need more advanced insurance coverage, including property and liability policies.

Large Businesses

At the enterprise level, it’s important to have insurance policies that can cover complex, multi-million-dollar risks. For businesses that reach this high level, we generally recommend working with a risk management specialist to determine the specific types of insurance that are best suited for addressing risk exposure.

Assess Your Insurance Needs with FullHR

Ready to learn more about custom insurance policies that fit your business’ size and scope? Our team is here to help. At FullHR, we’re happy to help our clients find right-sized insurance policies, whether that’s to meet the needs of a home-based business or a multi-million-dollar enterprise. Reach out to us to learn more.