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Business Insurance for the Small Business
by Gannon Pierpont
http://www.fproinsurance.com
If you're still in the planning stages of starting a new
business, you've probably enumerated all your expenses and
laid out all your needs in a business plan. In the
excitement of actually getting your business up and running,
it's too easy to plan for the best and forget to prepare for
the worst. A little insurance can go a long way to help your
business over crises and rough spots.
At the very least, according the the SBA, your business
should be insured against property damage, personal injury
and business losses due to catastrophic events.
Your most important coverage, and the one that will cost you
the most, is property insurance. A good property and
liability insurance policy will cover your business in case
of damages caused by events like fire and vandalism. It is
designed to allow you to rebuild your business in the event
that a natural catastrophe and certain other events damages
equipment and property vital to you business.
Vehicle Insurance If your business owns or uses automobiles,
trucks or vehicles, you'll need to insure them for personal
injury and collision. Even if your business doesn't own
vehicles, but you use personal vehicles for business
purposes, the SBA recommends a rider on your personal car
insurance to cover damages that happens while using your
vehicle for business purposes.
If your business uses any sort of specialized equipment,
including in many cases computers, you should insure them
under a special rider to your property insurance. Many
business insurance policies limit the amounts that they'll
pay for damages to technical and specialized equipment.
Other kinds of equipment that fit under the 'special rider'
category are cameras (for a photographer) or special
catering equipment.
Business Income Insurance While your property insurance will
cover the cost of damages to your property and equipment in
the event of a fire or other unexpected misfortune, it won't
cover the loss of income due to your being closed during
repairs. Speak to your insurance agent about business income
insurance that will reimburse you for estimated loss of
income due to forced closing in case of unexpected events.
Many insurance companies offer package policies for small
business owners that combine all needed insurance under one
umbrella - a Business Owners' Policy. Usually, the premium
on a business owners' policy will be substantially less than
you'd pay if you purchased each coverage separately. Your
insurance agent can help you tailor a plan that takes all
your business needs into account. He can even add specialty
coverage to a standard umbrella policy at a discount if you
combine everything into one plan.
Besides insurance that protects your company and its assets
in case of damage, most states also require that you carry
workers' compensation coverage if you employ others on your
premises, or to carry out tasks for your business as an
employee. Again, an insurance agent can help you decide
whether you need to carry workers' compensation for your
employees, but in general, unless those that work for you
are specifically employed as independent contractors or
consultants, they are considered your employees and you are
responsible for providing coverage for them.
You should also check your state's laws regarding health
insurance, not only for your workers but for yourself. Each
state has different laws regulating what insurance must be
provided for what size business, but in some states, it
works to your benefit if you are a self employed owner of a
business with one employee - yourself. In Maine and several
other states, certain insurance plans must be offered to you
at group rates even if you are the ONLY employee of your
business.
The needs of some businesses are complex enough that you
should consult an insurance agent who has experience in
insuring your type of business before. If you own a
restaurant or a retail store, an agent experienced in
writing insurance policies for those businesses can advise
you as to the best and most necessary coverage that you
should carry.
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