Insurance

A liability or property claim can kill a small uninsured business. Minimizing the consequences of risk begins with a comprehensive insurance program.

Selecting an agent or broker experienced in the commercial insurance market is vital. When considering business insurance, it is important to get several quotes or proposals as there is great variance in rates and coverage. Ask for agent referrals from other business owners, especially those in similar industries. Interview several insurance agents and make sure to review every policy to get a good understanding of its coverage.

There are several basic types of insurance, some of which are required by law.

Property Insurance covers buildings (owned and leased), machinery, materials, inventory tools, and money. Coverage usually includes losses arising from flood, fire, theft, vandalism, storms, and other causes of damage.

Liability Insurance covers damage a company, employees, or property may cause to people or property on the business’ premises or on a work site. Product liability insurance covers damage caused by products that are manufactured, distributed or sold. Professional liability insurance (often called malpractice insurance) and “errors and omissions” insurance cover losses due to mistakes or oversights caused by the business owner or employees.

Business Interruption Insurance will help businesses forced to close by property loss or certain other forces pay overhead costs until reopening.

Buy/Sell Insurance provides continuity in operations during a period of ownership transition caused by the death or illness of an owner or partner. It is a type of life insurance that permits a surviving partner to buy the deceased partner’s stake in the business from the deceased partner’s estate or surviving loved ones.

"Key Man" Insurance compensates a business for financial losses caused by the death or long-term disability of an essential person (owner or employee). It provides financial assistance to the company until the key person can be replaced or until that individual comes back to work.

Workers' Compensation insurance covers employees who have suffered injuries or illnesses resulting from job related duties. Coverage includes medical and rehabilitation costs and lost wages, and is required in most states. Each state has established its own minimum number of employees a business must have before coverage is required.

Business Vehicle Insurance - Business vehicles need the same types of coverage required for personal vehicles. Personal vehicles used for business purposes are not necessarily covered by personal vehicle insurance policies.

Fidelity Bond Insurance protects against loss of assets due to theft, forgery or other dishonest acts committed by employees.

Surety Bonds, often referred to as performance bonds, guarantee that a business has the financial resources to complete a given job. Through its Surety Bond Program, the SBA can guarantee bid, performance, and payment bonds for contracts up to $2 million for small businesses that cannot obtain bonds through regular commercial channels.

Disability Insurance provides income should a serious accident or long-term illness keep a person from working. This insurance coverage is available for owners and employees.

Health Insurance for business owners and employees can be purchased directly from health care insurance providers, but discounted coverage is often available from business organizations and associations.

Other Types of Coverage:

1. Credit Risk Insurance
2. Crime Insurance
3. Employment Practices Liability Insurance
4. Glass Insurance
5. Officer and Director Liability Insurance
6. Power Interruption Coverage
7. Rain Insurance (not the same as Water Damage Insurance)
8. Temperature Damage Coverage
9. Transportation/Shipping Insurance