Everything You Need To Know About Hazard Insurance for SBA Loan

Securing a loan for your small business means that you’re going to have to have your affairs in order. Part of doing this will be securing the right protection for your new venture. Hazard insurance for an SBA loan is necessary because lending institutions want to protect their risk. A business that is unable to operate due to a major loss will be unable to repay its loan, turn a profit, and may even shutter completely.

Texas is home to the second-most small businesses in the country featuring 3 million small businesses that call the Lone Star State home. But small businesses need protection as many different perils can work against business owners. Learn more about hazard insurance for your business, the requirements necessary to secure your SBA loan, and how to obtain coverage without overpaying.

What Is Hazard Insurance for SBA Loan?

Hazard insurance for small business will help protect the building your own or rent and operate out of. There are many different types of business insurance but a hazard insurance policy is at the core of any coverage plan because many businesses would fail to exist without a physical structure. Also known as commercial property insurance, here are a few common perils your structure is protected against when you enroll in a policy:

• Fire and lightning damage
• Damage from falling objects
• Damage caused by vehicles or aircraft
• Vandalism, rioting, and civil commotion
• Damage caused by the weight of snow, ice, and sleet
• Windstorm and hail damage

How you are protected will be determined by which type of hazard insurance for business you choose. There are three different types available to business owners:

• Basic Form Policies offer the least amount of protection for your commercial building. Here, you’ll find basic protections against perils including damage from vandalism, fires, explosions, accidents involving aircraft and vehicles, smoke damage, etc.
• Broad Form Policies give you everything in a basic form policy but also add protection from falling objects, leaking appliances, damage caused by the weight of ice/sleet/snow, and even structural collapses.
• Special Form Policies offer the most protection. You’re protected against all perils except those listed within the policy’s “exclusions”, which commonly include the following: earthquakes, flooding, general wear and tear, infestations, nuclear disaster, and war.

The more coverage you purchase, the better you will be protected, of course, this will also increase your insurance rate. However, through discounts and bundling, you can stay better protected without overpaying.

SBA Loan Hazard Insurance Requirements

Hazard insurance for your SBA loan is important, but the requirements will vary from business to business. There are many reasons for this including the lender you choose, the industry you are in, where your business is located, and so on. This is similar to why business owners will find that the amount they pay for hazard insurance will vary from insurance company to insurance company.

An SBA loan requiring hazard insurance will typically require at least 80% coverage from the business, however, it’s best practice to always insure 100% of your business. The last thing any business owner wants to face is having to pay even more out of pocket to restore a major or total loss. Failing to properly protect your company will harm revenue, eat at profits, and could fold your venture altogether.

To best determine the amount of business hazard insurance for your SBA loan needed, you’re going to want to research your industry, analyze your company’s assets, speak with your loan officer, and coordinate with the right insurance agent. Commercial insurance can be a complex field to navigate and keeping in touch with the right experts can help you jump the hurdles that come with starting your small business rather than being hindered from the start.

Where To Get Hazard Insurance for SBA Loan in Texas?

Hazard insurance for your SBA loan is important, but the requirements will vary from business to business. There are many reasons for this including the lender you choose, the industry you are in, where your business is located, and so on. This is similar to why business owners will find that the amount they pay for hazard insurance will vary from insurance company to insurance company.

An SBA loan requiring hazard insurance will typically require at least 80% coverage from the business, however, it’s best practice to always insure 100% of your business. The last thing any business owner wants to face is having to pay even more out of pocket to restore a major or total loss. Failing to properly protect your company will harm revenue, eat at profits, and could fold your venture altogether.

To best determine the amount of business hazard insurance for your SBA loan needed, you’re going to want to research your industry, analyze your company’s assets, speak with your loan officer, and coordinate with the right insurance agent. Commercial insurance can be a complex field to navigate and keeping in touch with the right experts can help you jump the hurdles that come with starting your small business rather than being hindered from the start.

Where To Get Hazard Insurance for SBA Loan in Texas?

Many different insurance brands offer hazard insurance, but where you enroll matters. When shopping for any form of business insurance in Texas, you’re going to want to consider the following:

• Am I overpaying for coverage?
• Is the insurance company I’m enrolling with financially sound?
• Does my insurance provider understand the needs of small businesses in Texas?

If you enroll with Freedom Insurance Group, you can be sure that all of your concerns are put to rest. Our agents have been serving small businesses throughout Texas since 2005. We understand what is necessary to help you secure your SBA loan and stay protected over a wide variety of industries.

We only work with top-rated insurance providers who are all partners through our insurance center. More than 25 different brands, to be clear, and we do this to provide our clients with the best options for their protection needs. Each insurance brand is going to look at the amount of risk it takes on when insuring your business. The more risk you have, the more you pay for coverage, and vice versa. Because each brand assesses risks differently, you’re going to see different prices for your coverage.

By comparing your coverage needs among top-rated, financially strong companies, we can identify the lowest price for your insurance policy without sacrificing coverage. We will even add applicable discounts and bundle additional coverages, such as commercial auto insurance or business crime insurance, that your company might need to stay better protected without overpaying.

Securing hazard insurance for an SBA loan doesn’t have to be a pain. Our agents are here to help. Get in contact with us by asking an agent how much we can help your small business save, or get your free business insurance quote today.