Business Insurance

There are three required types of business insurance

Your Insurance professional can provide invaluable advice to help protect your business from unexpected disasters. But you need to keep him or her informed about any major changes in your business. This includes major purchases, expansions or changes in hiring or the nature of your operation. Also, seek your agent's advice in terms of disaster planning. Ask what you can do to both reduce risks like fire or work-related accidents, as well as the procedures that should be in place in case your business does suffer a major catastrophe. Having the right coverage and a well thought out disaster plan can save you money in the long run. It may even save your business from going under. You may be able to reduce your premium for certain coverage's by following your insurer's recommendations. These can include workplace safety, disaster preparation, and human resource intervention.

Few things in life are riskier than launching and running your own business. You needn't compound that risk by neglecting your business insurance needs. Protecting your business from financial disaster will preserve all your hard work and long hours.

There are three types of small business insurance you need, including one that is mandatory. While business property and liability insurance is necessary, you're not legally obligated to have them, however employers must provide state-mandated coverage's for injuries and illnesses that are job-related through workers compensation insurance.

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Property Insurance for Small businesses

Property insurance can be purchased on the basis of the property's actual value (the replacement cost minus depreciation), its replacement value (the cost of replacing an item without deducting for depreciation), or on an agreed-upon amount (commonly used for art objects and other unique items).

Basic property insurance will generally cover your losses in the event of a fire or a lightning strike, and will pay the cost of removing property to protect it from further loss. Additionally, a standard small business policy will usually cover losses from windstorm, hail, explosion, riot and civil commotion, and damage caused by aircraft, automobiles, or vandalism.

Optional coverage can insure against earthquakes, floods, building collapse, and glass breakage. Property insurance can be categorized by what is insured and by the events leading to a loss.

You should take a complete inventory of all your business property, determine its value, and decide what's worth insuring. Make sure the items you do want to cover are provided for in the basic policy; if not, buy more coverage.

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Liability Insurance

Liability insurance will protect your business assets in the event you are sued. You should maintain a proper amount of liability insurance to protect the business you've worked so hard to build. Liability insurance will not only pay the cost of the damages but also the legal fees and other costs associated with your defence in a lawsuit, regardless of whether or not the lawsuit has merit.

Many small businesses have difficulty figuring out how much liability insurance they need.

Liability insurance will not protect you against claims arising from non-performance of a contract, wrongful termination of employees, sexual harassment, or race and gender lawsuits. Usually a surety bond is taken out as performance insurance. Employment practices liability insurance protects your business against employment-related claims, such as sexual harassment.

Determining the amount of liability insurance to buy is an important task, since the sky's the limit on lawsuits. You would be well advised to discuss it with your agent and check for recommendations from your trade association.

Some occupational licenses might require a set amount of liability insurance. If you rent your business property, check your lease, as it could require a set amount of liability. Then buy what you can reasonably afford, because the cost of the insurance will be far less than the cost of a lawsuit.

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Policies for Business Owners

Many insurance companies have bundled property and liability coverage into what's commonly called a business owners policy. It allows you to obtain broad coverage with affordable premiums. Even if you have such a policy, you'll want to consider adding coverage's that might not otherwise be included. Property insurance can be tailored to fit your needs since no two businesses are the same. Insurance companies selling business insurance offer policies that combine protection from all major property and liability risks in one package. (They also sell coverage's separately.) One package purchased by small and mid-sized businesses is the Business Owners Policy (BOP). Package policies are created for businesses that generally face the same kind and degree of risk. Larger companies might purchase a commercial package policy or customize their policies to meet the special risks they face.

Business Owners Policies include:

Insure Your Key Employee's

The loss of a key person can be a major blow to a small business if that person is the key contact for customers and suppliers and the management of the business. Loss of the key person may also make the running of the business less efficient and result in a loss of capital.

Losses caused by the death of a key employee are insurable. Such policies will compensate the business against significant losses that result from that person's death or disability. The amount and cost of insurance needed for a particular business depends on the situation and the age, health and role of the key employee.

Key employee life insurance pays a death benefit to the company when the key employee dies. The policy is normally owned by the company, which pays the premiums and is the beneficiary. Contact an insurance agent or broker whose specializes in key employee insurance for more on how much it may cost for your company.

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