This is a guest post courtesy of Claire Atkinson.
Dealing with insurance, (like dealing with pesky taxes or a credit card comparison for much needed start up funds) rarely invokes visions of unicorns and rainbows.
Unfortunately it is still a necessary expense, and not just when it comes to your health care.
Claire has graciously provided advice on the myriad options your business may or may not require.
Before making any decisions it’s always best to consult with an insurance professional. In the mean time, hopefully you find this post useful.
There are many pitfalls that can come along with the thrill of owning a small business.
It takes only a relatively minor mistake by an employee, or even the owner, to derail the dream of success.
No matter how well prepared the business plan is, there are unforeseen circumstances that can occur.
Fortunately, there are a variety of insurance policies a small business owner should consider to help mitigate the possible damage.
Some insurance policies will apply nearly universally to all small businesses.
Others will fit a small company better than others, and the owner will have to make some decisions on which ones best fit the nature of their business.
General Liability
This is one form of insurance just about every business should be sure it owns, even those that are being run out of a home.
General liability insurance provides protection to the company if the owner, an employee or the product or service the business provides injures another person or causes property damage.
It will pay for legal defense and damages if any are awarded.
Commercial Auto Insurance
Covering the vehicles owned by the business helps protects the owners and the employees.
The policy can be used to cover vehicles that are used to transport employees, equipment or products. The cars, trucks or SUVs can be covered for damage and collisions.
If employees use their own cars for work, the company should have a non-owned auto liability policy to protect itself if the employees have no insurance or inadequate coverage.
Worker’s Compensation
If an employee becomes injured while on the job, worker’s compensation insurance will provide wage replacement and medical benefits.
This can be one of the most important policies to own, especially for companies with a relatively high risk factor, as it can keep the business from being sued.
It is required in all states, though implementation will vary.
Professional Liability
For those providing a service of some kind, professional liability insurance is certainly something to consider.
It can protect the business in the event the service is rendered improperly or not at all by providing for legal defense fees and damages.
This sort of safety is not provided under general liability insurance. The insurance applies to professionals of all sorts, from attorneys to Zumba instructors.
This is also sometimes known as Errors and Omissions Insurance.
Property
A business that owns its own building or has personal property, including computers, tools or office equipment, should consider purchasing property insurance.
The policy will reimburse the company if the items are vandalized or they are damaged from fire, theft or smoke.
Discuss with the agent how specific the policy should be in what it will cover and the difference in the costs.
An addition to the policy in the form of business interruption insurance should also be considered, which will provide payment to the company in the event the loss of the equipment prevents operations to continue for a time.
Product Liability
Any business that produces a product should consider product liability insurance, as it will protect the company if a defective product causes bodily injury to someone or damage to property.
The amount of insurance purchased will depend on the amount of risk involved with the product being sold.
Data breech
A business is responsible for protecting any sensitive or non-public information it may store on computers or on paper about employees, customers or vendors.
If a breech in the security occurs, this policy will protect the company from legal ramifications due to the loss of data.
Life Insurance
This can be taken out for the owner as well as the employees.
It provides payments to the surviving family members in the event of the death of the policy holder. No one likes to think about such things, but this can be an extremely important policy to consider as it provides peace of mind to all involved.
Home Businesses
While a homeowner’s insurance policy will provide certain protections to the owner of a business run out of the residence, it will not cover all aspects.
Additional coverage may be purchased to cover property damage, but the business liability and property insurances listed above may also be necessary.
The right set of insurance policies can mean the difference between shuttering operations permanently and getting back to business quickly.
Catastrophe can strike at any time, so it is important to clearly consider all risks and choose the proper protections.
Over to You
Do you have any of the insurance policies above for your business? Are there any you may need that you didn’t realize you may need? Good food for thought, eh? My husband carries at least 4 of the above for his home remodeling business. Eeks. Please share this post if you find it useful!
