Money Management

Understanding small business insurance needs is crucial to protecting you and your business. Read on to learn about the different types you may need. [[{“value”:”

When you own or run a small business, insurance policies are something you have to think about and handle, even if it is (ideally) an expense you will never use. But if you ever do need to use it, you will surely be happy you have it.

It’s important to understand the different types of small business insurance your business may need. Knowing can not only help you make informed decisions about the right policies for you, but ensure that you don’t pay for damage out of pocket (or have to take on a small business loan to cover those costs).

Here’s an overview of the different types of small business insurance and what you need to know about each.

General liability insurance

Liability insurance (also sometimes called CGL insurance, for comprehensive general liability) protects your business from claims related to bodily injury or property damage caused by your business or employees.

Say that you own a tire shop, one of your technicians incorrectly installed a tire, and that negligence later caused a car accident for your customer, the driver. That is where your liability insurance would come in, as it not only would cover the cost of the damage, but any bodily injuries as well (up to the policy limit). CGL insurance also typically covers legal defense costs if your business is sued.

Property insurance

Property insurance covers the physical assets of your business, including buildings, equipment, inventory, and so on. It protects against losses caused by events like fire, storms, and theft. If a hurricane damaged your shop, your property insurance would cover repairs.

Property insurance is especially important if your business relies on expensive equipment or stores valuable inventory. And note: Even if you rent your store or office, property insurance would cover the contents inside your building.

Business interruption insurance

Let’s think about that hurricane scenario again. It is quite possible that if your business were in the path of a storm and that storm caused extensive damage to your store, you just might have to close up shop for a while while repairs are being made (ideally, these would be paid for by your property insurance).

As opposed to the property insurance, business interruption insurance can help cover your loss of income during that shutdown, as well as possibly the cost of relocation, if necessary.

Professional liability insurance

Also called errors and omissions (E&O) insurance, professional liability coverage protects service-based businesses from claims of negligence, errors, or omissions that occur in the course of providing professional services.

For example, let’s say that you are a lawyer and an ex-client sues you for malpractice because they didn’t like the outcome of their case. Professional liability insurance would help cover both your legal expenses as well as any damages (again, up to the policy limit).

Many states require that professionals like lawyers, doctors, and accountants carry E&O insurance.

Workers’ compensation insurance

Like professional liability insurance, many states require that if you have employees, even only one, that you have workers’ comp insurance. This insurance covers medical expenses and lost wages for employees injured on the job. Workers’ compensation can also protect your business from lawsuits related to workplace injuries.

And it is no wonder that this sort of insurance is often legally required: The average cost of a workers’ compensation claim (for 2021) was $41,757.

So, what kinds of insurance do you need?

I hate to sound like the lawyer I am, but it depends. It depends on the type of business you have, your risk of damage and lawsuits, and your tolerance of that risk. It is a cost-benefit analysis that you have to go through as a small business owner.

Once you are clear about what sort of insurance you need, it is important to shop around and compare policies. Work with your insurance agent or broker to ensure that you get the right coverage tailored to your business’s needs.

If the time ever comes that you need to use that insurance coverage, you will be happy that you were proactive about it now.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Airport lounge access and spending credits are flashy. But read on for a few unsung benefits offered by the best credit cards. [[{“value”:”

The best credit cards offer some pretty sweet benefits. Not only are they a secure way to pay for purchases, but many offer the chance to earn cash back or other rewards on your spending. And some offer credits for subscription services, travel purchases, or airport lounge access when you travel.

But that’s not all! Here’s a closer look at a few benefits of credit cards that aren’t gushed over as often — but can save you money.

1. Travel insurance

Hanging out in an airport lounge is a pretty sweet way to kill time at the airport, but having that lounge access won’t do you much good if your flight is canceled — or your luggage gets lost in transit. That’s why it’s worth looking for a top-rated credit card with travel insurance.

Coverage varies by card, but you might enjoy perks like trip delay insurance. This could compensate you for the extra meals you buy and the hotel you need to book when your flight is canceled and you’re stuck for a night. If your checked luggage goes missing, baggage delay insurance could compensate you for new clothing, toiletries, or a phone charger you might have to buy.

2. Primary rental car insurance

Let’s turn to a benefit that isn’t sexy but can save you money in the event of a mishap with a rental car. Some credit cards offer primary rental car insurance if you pay for a rental with the card.

The “primary” part of this is important — it means you’ll turn to your credit card’s insurance benefits before your own auto insurance coverage. If your rental car is stolen or breaks down and must be towed, your card’s benefits cover this. And if the car is damaged in an accident, your credit card’s insurance benefits pick up the tab for repairs.

It’s important to note that the coverage is capped at a certain dollar amount and may not cover exotic vehicles or rental periods over a certain length of time (such as 31 days). Nevertheless, this is a valuable benefit if you rent cars often. Find out more about the best travel credit cards and look for one with this perk.

3. FICO® Score monitoring

Staying on top of your credit score and taking steps to improve it (or keep it high) is one of the smartest things you can do to manage your personal finances. Having a high credit score translates to lower interest rates when you borrow money (in the form of loans or credit cards).

But it can also help you get hired, get approved to rent an apartment, and even save you money on auto insurance in many states. Research from The Motley Fool Ascent found that drivers with excellent credit paid an average of less than half of what drivers with poor credit paid for insurance premiums last year.

Some credit cards offer free FICO® Score access and will notify you of changes in your score and suggest ways you can improve it. Your FICO® Score in particular is a valuable credit score to know — it’s used by 90% of lenders when deciding whether to approve you for a loan (and deciding what interest rate to charge you).

4. Purchase protections

Finally, your credit card can give you peace of mind and save you money when you shop. If you buy something expensive, like a new phone, and it’s damaged or stolen not long after, a credit card with purchase protection can help.

You can also file a dispute with your credit card issuer if you make a purchase online and the item never arrives. You’ll need to reach out to the seller first to see if they can make things right, but if they’re not willing to work with you, your credit card company can make you whole.

These credit card benefits might not be as exciting as a travel credit, airport lounge access, or a free subscription to a food delivery service. But they can save you real money — and come to the rescue in the event of a travel or purchase mishap.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Keeping a credit card open for a long time has its benefits — and its drawbacks. Discover what could happen when you’ve had a card for over 15 years. [[{“value”:”

The conventional wisdom on credit cards is that it’s good to keep them open for a long time. If you’ve picked out one of the top credit cards for yourself, then you’ll probably want to use it for as long as possible. You may have also heard that this has a positive impact on your credit score.

While keeping a credit card account open is beneficial overall, there are potential drawbacks. If you’ve kept the same credit card for over 15 years, or you’re curious about what could happen if you do, here’s everything you should know.

It might not be the best fit anymore

One of my biggest money mistakes was using the same credit card for years after I’d built a high credit score. That card only earned 1 point per $1. I eventually realized that with my credit score, I could qualify for cards that earned twice as much back.

The credit card that was right for you 15 years ago may not be right for you anymore. You don’t need to cancel it, but if any of the following is true, it’s time to start looking for a new card to add to your wallet:

Your credit score has gone up quite a bit.Your lifestyle has changed.Your spending habits have changed.

Maybe you’re traveling more than you were when you first got your credit card, or you want to start doing so. If you have a high credit score, it’s worth getting a travel card. Click here to see our curated list of the best travel credit cards that can help you save on every vacation.

It looks good on your credit history

It’s true that having a credit card open for a long time helps your credit score. The length of your credit history makes up 15% of your FICO® Score. FICO® Scores are the most widely used type of credit score by lenders.

Your payment history makes up another 35% of your FICO® Score. So the longer you’ve been paying your credit card bill on time, the better your payment history will be.

If you’ve had a credit card open over 15 years with a spotless payment history, I’d bet that your credit score is in pretty good shape. After all, those two factors make up half your FICO® Score.

Your card’s features could change

Credit card issuers sometimes refresh their cards or phase them out entirely. When you’ve had a credit card for a long time, it’s possible that the card issuer could:

Change the rewards rateAdd new benefits or get rid of old onesIncrease the annual feeStop offering the card and transition cardholders to a new one

When your card goes through changes, that’s a good time to consider if it’s still worth keeping. Ideally, it will gain new features so you can get even more value from it. But if you’re not as keen on the card as you were before, there’s no reason to stick with it.

What to do with an old credit card you’re not using

If you’re not using an old credit card anymore, you have three options:

Keep it open. If it doesn’t have an annual fee, there’s no harm in keeping your card.Ask the card issuer to downgrade it. Some card issuers will let you downgrade to a card with no annual fee.Close it. This is the best option if you’re not using a card anymore, it has an annual fee, and you can’t downgrade it.

There’s a misconception that closing old credit cards will hurt your credit score. Luckily, that’s not the case.

Credit accounts that are closed in good standing, meaning without any late payments, stay on your credit history for 10 years. Even if you close an old card, it can still help your credit score for those 10 years.

By the time the account comes off your credit file, you’ll presumably have built up a long history with another card. Your credit score will be fine, so don’t let that fear stop you from closing a card you don’t need anymore.

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This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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