03.03.08
Protecting Your Interests With The Proper Small Business Insurance
Insurance needs of your small business is a crucial step for protecting your financial interests
When you begin putting your plans into action and meeting these small business insurance needs should be one of the first things you do. A simple homeowner’s policy usually isn’t enough to cover every facet of a startup small-business. Different policies are designed for many different purposes, let’s talk about some that will protect your small business ensuring its survival even in the face of unforeseen catastrophe.
Some factors to consider when signing up for small business insurance
When looking for small-business insurance considering the following can help you to be sure that your financial interests are completely covered. Be sure to look for a policy that covers replacement cost of the building your business is housed in if you own it. Don’t forget to take into account upcoming changes in zoning and building codes that can change the price of future construction.
Also, don’t forget replacement costs for furniture, supplies, lighting in addition to items specific to your small business like tools, equipment and finished product. Simply replacing all these items in the case of theft or fire would be enough to destroy almost any fledgling startup. Take additional precaution by factoring in fluctuations in activity during different parts of the year. Re-calculating your inventory is total value during busier seasons may be necessary to maintain sufficient coverage.
Be aware of special conditions specific to electronic equipment
Some small business insurance policies have special conditions related to items like computers and other electronics. Be sure to speak with a representative in person if you can’t find specific information related to the topic in your policy’s literature. Just as important as what you specific policy covers, like personal computers or larger manufacturing equipment, is the type of damage it protects against. Is your small business covered for loss of production that can result from mechanical breakdowns that occasionally occur with manufacturing equipment? If you can’t find specific information in your policy, be sure to ask a representative if special coverage is necessary for your computers and company vehicles if you have any.
Does your small business insurance policy protect against natural disaster?
Depending on your location and its extremely important to consider the effects of a natural disaster on your small businesses finances and the extent to which your insurance policy is prepared to cover these unforeseen expenses. Take into account not only replacement costs for items damaged, but lost income, while you’re getting the business up and running in case of a natural disaster. Many small-business insurance policies have an umbrella liability policy that can protect your interests during catastrophic events such as hurricane and earthquake.
Insuring your small business against potential lawsuit
We could write a whole other book on this topic. For now, though, it’s important that you consider protecting your small business against potential lawsuits and the attorney fees and court costs and possible settlements that could result from an unforeseen lawsuit against you. It’s also important to check whether or not your policy includes not only protection for yourself but for your small businesses and insurers and other employees in the event of a lawsuit. Perhaps you should consider incorporating your small business to protect your personal assets.
Periodically review your small-business insurance coverage
You should stay on top of your insurance coverage for your small business. In order to make necessary changes. When I’ve heard you upgrade equipment or have a change in inventory. These new items should be covered in your policy. Also, additional coverage is typically necessary for new add-ons to the building that houses your operation.
Discuss your needs as they become apparent with your insurance agent. Speaking directly with an agent accustomed to dealing with small-business owners is the most efficient way to determine whether your specific operation has sufficient coverage. And just as importantly, once you are covered sufficiently keep your policy in a safe place. Walked in the top drawer of the desk in your office isn’t going to help you if you’re building catches fire. Be sure to keep you your physical policy in a fireproof safe or even better a safety deposit box off-site might be even better.
