Updated June 7, 2022
If you are considering a new business venture or recently opened your first business, there are some important insurance decisions to consider. Business insurance protects you from accidents, natural disasters, and unexpected costs.
“Gotta” Have Vs. Should Have
Although many types of insurance policies and packages available to small businesses today are extensive, too many business owners are mainly looking to insurance to meet requirements set upon them by others – such as banks, lienholders, landlords or government regulators. Don’t let the “gottas” become your entire insurance program, but consider further options you may need regardless of the demands of others. The goal of insurance is to protect you and your business from risks. Skimping on coverage can devastate you in the event you do have a loss.
Common Types Of Business Insurance
Here are some of the common types of business insurance you may need. Everyone’s situation is different, so contact us for a personal review.
General Liability Insurance
One of the more important coverages a business owner can buy. It can help with the costs for third-party bodily injury or property damage claims that a business may incur. It can also help pay for legal costs, witness fees, and possible judgments or settlements.
Professional Liability Insurance
This policy provides coverage against losses incurred because of errors and omissions in the performance of your professional service.
Commercial Property Insurance
This coverage provides protection for your business property, such as buildings, tools and equipment as well as inventory, against covered losses you may incur.
Business Income Insurance
This insurance coverage helps replace lost income when a covered loss prevents you from conducting normal business operations. It may also provide coverage for extra expenses that you incur to get your business back up and running. You may choose to try to reopen as quickly as possible at another location. Business Income Insurance could help cover the “hurry up” expenses of making the move, installing the necessary equipment, and notifying your current clients.
Business Owner’s Policy
This policy combines property and liability coverages into one bundle to help simplify the insurance buying process. This insurance is great for many small business owners as it makes it easier having coverages in one place.
Home-Based Business Insurance
This is a type of commercial insurance policy designed for certain small, home-based businesses.
Commercial Auto Insurance
Do you or your employees use a vehicle in your business? This coverage helps protect against work-related auto accidents by providing liability, first party benefits, and possible coverage for damage to your vehicle.
Workers’ Compensation coverage is required by law in most states. This coverage provides benefits to employees for work-related injuries or illnesses. It includes coverage for medical care, wages from lost work time and more.
Replacement Cost Coverage
Although your building may be covered for the amount required by the mortgage holder or even what you paid for it, what would it really cost to rebuild it from the ground up following a major loss? Are there special design issues that may raise the building costs? Are there any building ordinances (such as requiring all new buildings of your type to have sprinkler systems) that will significantly increase your rebuilding estimates? If your building was “grandfathered” under your community’s current building restrictions, will you even be allowed to rebuild at your current location? (Have you checked local zoning ordinances lately?) These are all considerations you should make when assessing your replacement costs.
If your business survival – at least in the short term – is dependent upon the work of a key employee, then it would be well worth your time to: (1) explore buying a life insurance policy for your business on that key person, (2) provide a financial buffer in the event of that person’s death until you can find another equally talented individual, or (3) reorganize your business.
The first step in determining the type of coverage you need is to assess your risks. Each business is different and will have different insurance needs. Feel free to contact us, we will be happy to help you figure out what insurance coverage best fits your needs and budget!