If you're a proud owner of a new business – or even just kicking around the idea of hanging your own single – You have probably realized that there is a long list of things and problems to deal with. From start-up capital to suppliers to operating space to legal documents … the list probably never seems to end.
Then of course you have insurance.
Despite what you may see or hear, insurance is not a one-size-fits-all product. Rather, technical insurance is a risk financing mechanism that allows you to transfer part of your risk to the insurance company you choose. In other words, you pay a small cost (in the form of a premium payment) to enter into an agreement with an insurance company to make them keep you whole in case of loss (claim).
So where do you start?
Think about the most valuable assets that are part of your business. It can be raw materials, warehouse / warehouse or maybe a building you have bought. These are all property-related exposures, so you need a property insurance that corresponds to your exposure. If your business is heavily dependent on real estate-related exposures to operate, what would happen if a disaster affected and damaged parts or your entire property? Simple: you would get a check from the insurance company to replace it, right?
Not so fast! How about the loss of income you would receive while you had to wait for your property to be rebuilt, repaired or replaced? This can be covered under an additional property protection called business income. Ideally, you also want to get extra cost coverage, as it would pay for many extra costs you would incur to get your business up and running as quickly as possible.
Now that your wheels are spinning, you're probably thinking the same thing as most business owners do at some point: what if I get sued for something ??? This is where liability protection comes into play. You need what is known as general liability to cover you for claims / lawsuits arising from bodily injury and / or damage to property from your products, completed operations and personal and advertising damage that arises as a result of your company. However, injuries to your employees are not covered by this – you will need compensation for workers for it.
If you are a professional of some kind, you can also be sued for a professional mistake. This is not covered by general liability insurance but is handled via a professional liability policy or liability insurance error. Keep in mind that there is a wide range of industries that are professional in nature, so this coverage is not just for doctors and lawyers. This coverage applies to consultants, cosmetologists, marketing companies, accountants, staffing companies and more!
On the other hand, if you are an entrepreneur, you probably have plenty of tools and equipment that are valuable to your business. These must be covered under what is called an inland marine policy or inland shipping in a package policy, as they are used in different workplaces as part of your business. Coverage can also be purchased for equipment that you may need to rent as part of a job.
Many companies use cars as part of their business. Corporate car insurance must be purchased for all vehicles you have that have the name of your company. In addition, you want to consider rented and non-owned car liability for situations where you need to rent a vehicle for business or an employee needs to use their personally owned vehicle for business reasons.
Finally, what happens if you have a REALLY large claim arising from a car accident, an injured customer or some other claim liability? This is where a commercial umbrella comes into play. Umbrellas provide additional liability protection if an underlying insurance has its insurance limits exhausted due to a large loss. You can learn more about commercial umbrellas here, as there is often a lot of confusion about what they are and how they work. from which you can work. Contact your local independent insurance agent to learn more and develop a program that is specific to your needs as a business owner!
The information above is of a general nature and your insurance and coverage may differ from the examples provided. Read your insurance policy in its entirety to determine your available coverage.
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