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Small Business Insurance Types | General Liability, Workers Compensation, More
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Mar 24, 2025
In this episode of "Small Biz in 15," host Shawn Hessinger interviews Alon Shiran, VP of Product and Design at Next Insurance. They discuss the significance of insurance for small businesses, with a focus on the various types of insurance coverage required to safeguard businesses effectively. Shiran introduces Next Insurance, a technology-led insurance provider founded in 2016, with a mission to support and simplify insurance needs for small businesses. Small businesses face different challenges and stages in their life cycles, which affect their insurance requirements and preferences. Shiran explains the fundamental insurance types for small businesses, including general liability, worker compensation, and more specialized coverages. General liability insurance protects businesses from third-party property damage or bodily injury incidents, making it essential for a range of industries. Workers compensation is crucial for businesses with employees. It covers medical expenses, lost wages, and more if employees are injured while working. A Business Owner's Policy (BOP) combines general liability with commercial property insurance, covering physical assets and equipment within a business. Businesses that involve driving, deliveries, or transportation need commercial auto insurance to protect vehicles, employees, and liability. Umbrella or excess liability insurance extends coverage limits, providing extra protection against costly legal claims. Small businesses reliant on valuable tools and equipment, such as contractors and service providers, benefit from specialized insurance to cover these assets. Next Insurance aims to address the fragmented small business insurance landscape through technology, offering tailored recommendations, instant purchasing, and partnerships with software platforms. Advanced AI and data sources allow Next Insurance to provide accurate, customized insurance suggestions to ensure businesses are adequately covered.
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and again that I think that is is kind
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of the beauty of of insurance with small
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businesses when you're really limited
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with cash
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Insurance it becomes even more important
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[Music]
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I'm Sean hessinger and this is small Biz
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in 15. the show where we bring you small
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business news and tips to make your
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small business better today Alan she ran
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vice president of product and design at
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next Insurance explains what kinds of
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insurance your business might need and
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why okay Elon can you tell us a little
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bit about yourself and and next
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insurance and what you guys do sure and
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so I've been with next for about a year
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and a half now I lead all product
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development and our ux designers at next
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and next is a company that was founded
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around 2016 and with a mission to how
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small businesses Thrive and by providing
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them really a One-Stop shop for the
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insurance needs and where our technology
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led a full stack insurance provider so
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we're really taking on the entire value
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chain and that includes writing the
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policies we are the carrier handling
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claims pricing servicing underwriting
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everything and really focusing around
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technology and specifically solving
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small businesses need
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well that brings up an interesting point
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that I wanted to mention first which is
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really small businesses
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um what what's the difference between
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their needs and and larger businesses
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that that I mean this sounds like a real
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Niche so what is the difference
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um so I would say the difference is
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probably where the biggest difference is
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where they are in their life cycle and
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so many of our customers are really
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they're new in business this is maybe
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the first time that this business owner
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is starting a business and they they
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really they're unfamiliar with with
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their needs and so I would say that's
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kind of one of the problems they're
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facing and that we want to solve for
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them is to make it as easy as simple for
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them and the second thing is usually
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their needs are
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and more specific and smaller so for
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example they might they're more likely
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to have one location or they're more
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likely to have one car or just a few
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employees so really the coverages that
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are right for them are very different
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than a larger chain for example
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well I mean I know this from from
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starting my own small business and I'm
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sure a lot of people know this uh from
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starting small businesses out there you
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start a small business all the things
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you're concerned about is you know
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bringing in Revenue uh being able to pay
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your employees and all this other stuff
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and probably the last thing on your mind
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is insurance and you probably also think
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to yourself well I I I I I don't know
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what kind of insurance I need at this
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point why does a really small business
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need insurance I mean what what kinds of
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and what kinds of insurance do they need
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right a great question
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um so maybe I'll start with the kind of
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insurance and that kind of uh well
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naturally lead into why a small business
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would want something like that or need
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it and so there are a few different
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types of business insurance the most
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common one is general liability
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sometimes also called business liability
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and that protects businesses from
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whether they cause damage to a
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third-party property or for example
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there's bodily injury in their own
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business
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so for example if you're a plumber and
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you go to your client's house and you
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accidentally hit their window with the
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ladder and things like that that will
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protect you right and so that's one that
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is very common it also covers things
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like if you're a restaurant owner and
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you sell liquor than what you would want
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want is a general liability that has a
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liquor coverage so if you for example
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um sell liquor to someone that later
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goes on and drives drunk and has an
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accident
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that will protect you in case of a
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lawsuit against you so that's gender
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reliability for example another very
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popular one is worker compensation and
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that protects your employees from if
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they get injured so workers compensation
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will pay you or cover any health care
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costs but also damages to the struggle
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that you're having to continue to work
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so lost wages in most cases that is
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required by law so an employer must have
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workers compensation if they have
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employees
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so really there's a mix of the law that
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you need to have that and two is
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protecting yourself and protecting your
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business but those were two examples of
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kind of the more common Insurance types
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for small businesses so when you talk
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about liability insurance and why we
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need it you mentioned two specific
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examples but let's let's think of a
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business like
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um I I don't know can you think of some
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other let's let's talk about the breadth
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of liability insurance because there's
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some things that probably people aren't
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thinking of all right that that that
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that
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liability insurance could cover right
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and so we talked a little bit about
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business liability and I I would say
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that and you can categorize businesses
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in many ways but one common way is
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whether they have a physical location or
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is it you know Joe the plumber going to
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someone's house and fixing stuff and
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general liability will cover different
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things there so again if you're in a
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restaurant we talked about liquor but
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another thing that general liability
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could cover is if one of your customers
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slips
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and gets injured so that that will will
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help cover that I guess general
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liability is very popular because it is
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so Broad and it covers you for these
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really different things like another
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person's property and damage and losses
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but yeah also if one of your customers
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gets hurt so that will cover that
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there's another type of liability that I
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didn't mention which is professional
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liability
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and professional ability is very popular
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or very in demand in the more
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Professional Services so like tax tax
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accountants and and lawyers and things
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like that
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and that covers you from mistakes that
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maybe you maybe you had a in your
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profession so for example if my account
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that messes up with taxes and I get a
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penalty
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if I decide to sue them or anything like
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that then they would be covered if they
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have professional liability
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and so that's another type of liability
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that really depends on the small
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business type like you said and they're
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like maybe a thousand different
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categories of small businesses you said
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if you need any if you have employees
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you need workers compensation right um
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or or are there aspects of that that
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businesses might not especially small
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ones might not think about yeah so as I
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mentioned it can cover many things
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obviously the most trivial and the one
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that jumps to mind the most businesses
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when you ask them what do they think
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work workers compensation covers there's
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medical expenses
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but it also covers lost wages and
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survivor benefits and permanent injuries
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and employee liability and things like
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that and so if let's say you are on a
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construction site and one of your
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workers hits their foot because a beam
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fell
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that's something that happens a lot they
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have some sort of a injury to their leg
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with that insurance and they would be
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covered for the last wages because of
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that injury
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and with small businesses we often know
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that they don't have a ton of cash lying
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around right so this really can save a
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business and besides that as I mentioned
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earlier it's really important for
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businesses to know that workers
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compensation in almost all states is
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required by the law I also noticed on
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your website the business owner's policy
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what is that and and and and and who who
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who needs it or benefits from it what
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does it do yeah so business owner policy
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or we sometimes call it bot that's kind
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of the the name of the industry it's
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basically two insurances that are
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bundled into one it is the general
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liability that we talked about but it
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also has commercial property insurance
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commercial property covers your property
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but not only the property it covers
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what's inside it and I think many
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businesses don't realize that
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and they think that because they're
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renting a place that commercial property
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won't help them
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but again let's go back to the
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restaurant case
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all that equipment inside your kitchen
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that is often hundreds of thousands of
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dollars that is covered by commercial
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property so if you have a fire in the
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kitchen or things like that or there's
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some weather event and all your tables
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or whatever are kind of destroyed this
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thing covers you
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and again that I think that is is kind
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of the beauty of of insurance with small
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businesses when you're really limited
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with cash
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Insurance it becomes even more important
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let me ask you about another one that
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seems on the face of it a little more
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specific which is which is um
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you know Commercial Auto policies
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um
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what what kinds of businesses need this
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is it broader than people might and
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first think
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yes and so commercial and auto any
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business that drives or has either a
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driver or even if the business owner is
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driving a car as part of their business
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Commercial Auto is the insurance that
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they would need it is actually in many
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states required Again by the state by
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law
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um to cover it
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and things that would be covered are
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obviously accidents to you or your
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employees
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um you know bodily injuries but also to
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your auto itself and so I would say the
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most common businesses that we see
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purchase these are are contractors
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plumbers Realtors you know the
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businesses that you would imagine drive
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around and and are less stationary we
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also see that a lot with the delivery so
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food delivery is Big especially since
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covid right and we get a lot of things
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delivered to our house so we see that
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also of course uptick during these times
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there are two other insurances that are
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pretty popular one is umbrella that
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actually today next we announced that
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we're launching umbrella or excess
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liability in 41 States
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and what general or sorry what umbrella
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is or excess liability it basically sits
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on top of your general liability but
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extends the coverage it limits to 1
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million or two million dollars and so
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that's something that we see many
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businesses also buy and usually they
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will buy that because there's a third
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party that is asking them to buy it
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so maybe I'm a subcontractor working for
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a general contractor and they're going
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to ask me to do that or I'm leasing a
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space or whatever and the real or the
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real estate agent is asking me to show a
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proof of insurance for that so there's
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some cases for for umbrella access
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liability and the other one is tools and
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equipment which is sometimes called
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Inland Marine
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but this is also a very popular one for
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the Home Services or construction
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classes and this insurance what it
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covers is basically
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you're driving around with your truck
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and there's a lot of expensive equipment
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in there
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that will cover the equipment
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and many businesses we see purchase that
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when you know electricians and plumbers
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and those categories that's really a I
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would say a basic insurance for them to
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have so one thing that's uh I would say
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pretty special about the small business
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insurance industry in the US it's very
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fragmented there is no clear leader
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and next is that we see that as a really
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a good signal that there is no one yet
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that has solved this in a really
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complete and best way and we think that
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we have the opportunity to go and solve
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that problem for small businesses and we
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want to do that with being obsessed and
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really focused on small businesses and
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solving their problem with technology
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so I can provide some examples of how we
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do that
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we can split it just in an easy way to
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understand it is kind of the purchasing
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experience and then post purchase so we
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use a lot of AI and machine learning
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capabilities and access to Digital Data
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sources in order to provide a really
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good experience and the purchasing
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experience and to provide an accurate
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quote
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we really want a tailored Insurance
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recommendation for the business so
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they're not underinsured but also not
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over insured and just spending a lot of
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money on something they don't really
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need right and so we do that again with
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third third party data sources and AI
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and what that also lets us do is sell
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insurance instantly so what we see in
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the industry is almost all the policies
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that are purchased go through an agent
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because we are a technology-led company
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in digital experience we have three
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channels we have agent channel that
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we're investing a lot in and we view our
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review agents also as our customers
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but we also have our direct Channel
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which is basically you sitting in your
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living living room whenever is
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comfortable for you and kind of checking
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out when Insurance do I need and you can
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buy it on the spot without talking to
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anybody and in a minute you would be
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insured and the third one
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um isn't what we call embedded insurance
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or partners
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so we partner with a lot of the SAS
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products that small businesses run their
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business on whether it's with QuickBooks
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or Gusto or whatever and because we are
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digital
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and underwriter and carrier we can
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basically partner with this technology
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products and and get a lot of
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information in sync from them so for
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example let's say you have workers
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compensation on one of these platforms
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as a small business you are required to
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update your insurance about any changes
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in employees and employees salaries and
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what they do but because we are
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integrated with the software that you
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run payroll on
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we can do that automatically for you and
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save time well that's it for another
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episode of small business 15. thanks
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again to Elan she ran of next insurance
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for making this show possible please
13:53
like And subscribe if you enjoyed the
13:55
show and please leave a comment and let
13:58
us know what topics you'd like to see
13:59
covered in future programs for more
14:02
small business news and tips join us at
14:04
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