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A practical guide for starting a small business

Small Business Insurance Coverage

An Ounce of Protection - Small Business Insurance Coverage

When you start your own business, there are risks that you are undertaking. What would happen if someone slips inside your gift ship and decides to take you to court?  How about someone ate a donut in your Coffee Shop and ended up with food poisoning?  Your customer takes you to court.  If you live in a hurricane, earthquake or tornado area of the world, what would happen to your business in the event of a natural disaster?  For all these reasons, Small Business Insurance Coverage is a must.  Start with your personal insurance company and see what they offer.

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Protect Your Business - Small Business Insurance Coverage

There are four Basic Types of Small Business Insurance Coverage:  General Liability, Worker's Compensation, Auto, and property/casualty.  There is a premium fifth option called umbrella policy.

  1. General Liability - protects a business against accidents and injuries that took place on its premises as well as exposures to the company's products.  
  2. Workers' Compensation - covers medical and rehabilitation costs and lost wages for your employees injured on the job.  There are two mandatory parts to this type of insurance:  Medical cost and lost wages of injured worker and the employer's liability from worker's family suing the business in case of death.  The third optional item is termed employer practices for protection against the claims of harassment and discrimination by its employees.  First time purchasers of this insurance will be charged based on your payroll and the average cost of insurance in your industry.
  3. Auto Insurance - If you use your vehicle for your business or you have employees who drive the company delivering van, you will need this type of insurance and protect your business.
  4. Property/Casualty Insurance - protects your business building and its content against disasters (flood, hurricane, earthquake, tornados, avalanches, fire).  In certain areas of the country where these disasters occur often, you may need to pay a premium to be covered. Be sure to ask.  Also, choose the replacement cost option.  That allows you to replace your damaged goods at today's prices not what you paid for them ten years ago.
  5. Umbrella Coverage - additional layer of protection. Pays for coverage in excess of your regular coverage.

Having the proper Small Business Insurance Coverage not only gives you a peace of mind but it also protects you from a disaster whether it is natural or manmade.  Take your time and complete this very important step properly.