How the Goldilocks Method Works

How big is your enterprise? Whether you’re running a small, medium, or a large business, you need insurance coverage that’s “just right.”

But as your business grows, it might be difficult to determine where you fall on that spectrum and exactly what your insurance needs are. Here’s a simple guide that will help with this process.

Small Businesses

If you run your operations with fewer than 50 employees, you have a small business. Typically, companies that employ fewer than 100 employees fall within this group. However, the Small Business Administration includes any business with fewer than 500 employees in this category. According to the Chamber of Commerce, these modest enterprises make up 99.9% of businesses in the United States.

If you find yourself among the more than 30 million small businesses in the nation, your typical insurance needs can be covered by a Business Owner Policy or BOP. This package policy covers standard liability and property insurance risks. If you offer unique services or products you suspect might not be covered by this basic policy, we can explore additional options for your company.

Medium-Sized Businesses

The waters that separate small and medium-sized businesses are a bit muddy, but generally, any company that employs between 100 and 500 staff and generates between $10 million and $1 billion annually is considered a medium-sized business. (If you employ between 101 and 499 employees, you’re likely to be lumped into the general category of SMEs, which are small and medium-sized enterprises.)

The important aspect to focus on is that higher employee and revenue numbers mean you’ll need additional insurance coverage. If you’ve grown beyond your initial startup phase, it’s time to reevaluate your insurance needs.

Policies specifically designed for medium-sized businesses are available that combine liability and property coverage. It’s also important to note that you may need specialized policies if you have expensive equipment or locations in multiple states.

Large Businesses

Businesses that employ more than 500 people are considered large. At this level, the company is exposed to various multimillion-dollar risks. Commercial insurance policies for these businesses must be designed to mitigate those risks. With more moving pieces, the business needs more types of insurance coverage and higher policy limits. Common policies include commercial vehicle insurance, professional liability, workers’ compensation, product liability, and business interruption insurance.

Home-Based Businesses

Entrepreneurs who are just starting out have insurance needs too. Even if you’re still operating from a card table in the garage, you may have liabilities that require coverage.

Homeowner’s policies don’t always cover these needs. If you’re in this situation, we should review the size and scope of your business to determine if you should set up a separate commercial insurance policy.

Still not sure which category fits? If you have special services or circumstances, you might not fit neatly into any of these classifications. Feel free to contact me to review your options. We can work together to ensure your business has the protection it needs, whatever its size.