Most business need a certain amount of Insurance in order to protect their company from liability or other risks. A new small business might need just a few key insurance policies in order to safely start and conduct business. But, as a company grows or employs more workers other insurance products and policies are going to be important.
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Some of the Key Business Insurance Products Growing Business Might Need:
- Business Overhead Expense Insurance: This is like business disability. The policy is designed to pay the costs of a business when the business owner is disabled.
- Business Life Insurance: Is Life insurance on a member of the company or business. Often purchased for partnerships to protect a surviving partner from loss caused by the death of the other partner. Large corporations may also use Business Life Insurance to protect from losses that result when a key employee dies.
- Business Income Insurance often called Business Interruption Insurance these are Commercial policies designed to reimburses a business owner for lost profits and continuing fixed expenses during the time that a business is closed during repairs following physical damage caused by an insured peril. This insurance sometimes covers other financial losses such as times when civil authorities might limit access to a business following a disaster where their actions make it impossible for customers to reach the business.
- Business owners Policy (BOP) These are great for the small business. They are a policy offering combined property, liability and business interruption coverage as a package and usually have a lower premium then separate insurance policies would.
- Buy-Sell Agreement: This is a business contract used for succession planning of a sole proprietors, partnerships, or closely held corporation. This agreement provides for the sale of a business when an owner dies, has a disability, retires, or some other agreed event.
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Business Property insurance should include the coverage to protect your business property for a wide variety of perils and losses. A typical policy should include:
- Buildings: The coverage would be needed if you the actual building the business uses. Leased or rented business premises, should have this provided by the landlord.
- Business personal property includes all of the office equipment and tools.
- Loss of Income
- Earthquake and Flood (which may or may not be available)
- All-risk policies can be written to cover all of the business equipment, including computers and hardware, software, and often even data recovery. A well written policy should cover loss of income resulting from breakdowns, and loss of income for other risks that may close down the business temporarily.
Liability Insurance
Business Liability insurance is a must for everything we do now a days, so business liability is a must. With a Comprehensive General Liability (CGL) policy a business has coverage to third parties in the following:
- Personal and Advertising Injury
- Fire Legal Liability, which is often mandatory if you lease your premises. This protects you in the event your negligence results in damage or loss to your landlord’s property. For example: you mistakenly leave a small electric space heater running and go home for the evening. During the night, the heater shorts and starts a fire, resulting in fire and smoke damage to your landlord’s building. In this case, the negligent act of leaving the space heater on caused the loss. This is where Fire Legal Liability protects your investment.
- Products and Completed Operations
- Medical Expense or Medical Payments
- General Liability for your premises. The best illustration is the common “tripping over the torn carpet, resulting in an injury” loss.
- In some cases policies exclude Products and Completed Operations and/or Personal Injury and Advertising Coverage. This will depend on the nature of the business. In same situations a business needs Professional Liability, Malpractice, or Errors and Omissions Insurance Policies.
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