Small Business Insurance 101: Find Out What Type of Coverage You Need

Having the right business insurance does more than just give you peace of mind; it’s an integral part of an overall management strategy to help you stay competitive and protect your company in the event of an accident or disaster. While many small business owners seek to get away with minimal coverage, others overpay on insurance they don’t need. You can avoid both of these extremes by first educating yourself about business insurance 101, then consulting a business insurance expert to advise you about the right coverage for your situation.

Although at first paying business insurance premiums might seem like a burden, the real question is, can you afford not to have adequate coverage? You never know when a natural disaster will strike, or if an employee will have an accident in a company vehicle. It’s better to be prepared than to be hit with a large bill after some catastrophic event takes place. (Just look at the aftermath of Hurricane Katrina had on businesses that were located in the Gulf region. Would your company have survived such a natural disaster?)

When considering your business insurance needs, ask yourself these questions:

• Do I have adequate business continuation coverage? If a natural disaster were to strike your business, will you be able to set up and continue operations in another location?
• How often will I be updating my liability coverage? Don’t fall into the trap that many small business owners find themselves in. They purchase a policy, file it away, and never look at it again. Review your insurance policy at least once a year to make sure it still meets your needs.

Business insurance 101: Types of business insurance

Here are some of the basic types of business insurance that are available:

• Property and liability coverage. You never know when a fire, flood, or other natural disaster will strike. Property and liability insurance will also shield you from judgments for accidents on your property or involving your employees. Make sure you have adequate coverage in this area.
• Health and medical coverage. As your business grows, you will want to offer some type of health insurance for your employees. Consult a health insurance broker for the best deals on these plans. Offering a good health plan helps attract and retain the best employees.
• Directors and officers coverage. This type of insurance protects the directors and officers of a corporation from personal liability in the event of a claim against the business.
• Key executive life coverage. Your key employees are the heartbeat of your organization, so make sure you have adequate insurance coverage on them.
• Vehicle coverage. These policies typically cover liability for injuries involving the vehicles owned and operated by your company.
• Disability coverage. This insurance continues to pay a portion of the salary of a worker who has sustained an injury and can no longer work.

Consult with a knowledgeable business insurance broker before purchasing any policies. If you are just launching your business, make sure you have adequate coverage before you open your doors. If you have an existing business and have not reviewed your business insurance needs for some time, schedule an appointment with your agent or broker as soon as possible.

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