Insurance

Types of Insurance to Consider

The various types of insurance most commonly used by small businesses.

Liability

Businesses may incur various forms of liability in conducting their normal activities.  One of the most common types of liability is product liability, which may be incurred when a customer suffers harm when using the business’ product. There are many other types of liability, which are frequently related to specific industries.  Liability law is constantly changing. An analysis of your liability insurance needs is vital in determining an adequate and appropriate level of protection for your business.\

Property

There are many different types of property insurance and levels of coverage available.  It is important to determine the that property you need to insure for the continuation of your business and the level of insurance you need to replace or rebuild.  You must understand the terms of the insurance, including any limitations or waivers of coverage.

Business Interruption

While property insurance may pay enough to replace damaged or destroyed equipment or buildings, how will you pay costs such as taxes, utilities and other continuation expenses during the period between when the damage occurs and when the property is replaced? Business interruption (or “business income”) insurance can provide sufficient funds to pay your fixed expenses during a period of time when your business is not operational.

“Key Man”

If you (and/or any other individual) are so critical to the operation of your business that it cannot continue in the event of your illness or death, you should consider “key man” insurance. This type of insurance is frequently required by banks or government loan programs.

It can also be used to provide continuity in operations during a period of ownership transition caused by death or incapacitation of an owner or other “key” employee.

Automobile

It is obvious that a vehicle owned by your business should be insured for both liability and replacement purposes.  What is less obvious is that you may need special insurance (called “non-owned automobile coverage”) if you use your personal vehicle on company business. This policy covers the business’ liability for any damage which may result from such usage.

Officer and Director

Under certain circumstances, officers and directors of a corporation may become personally liable for their actions on behalf of the company. This type of policy covers this liability.

Home Office

If you are establishing an office in your home, it is a good idea to contact your homeowners’ insurance company to update your policy to include coverage for office equipment. This coverage is not automatically included in a standard homeowner’s policy.