Insurance Options for Your Small Business

All small business owners, whether they own cafés or small newsstands, need insurance of some type or another. In today's world of fraudulent lawsuits and a general prevailing atmosphere of "I'll take whatever I can from whomever I can", this is a necessity.

The first step in your quest for insurance should be to find an insurance agent or broker. Asking friends and acquaintances in your geographical area and field which agent they use is a good start. If this fails to turn up any reliable leads, ask the company that provides your personal insurance about extra coverage. Most companies will offer lower rates because you already do business with them.

Once you find a broker or agent, make sure you inform him of the profile of your business. He can help you develop a specialized profile for your business needs, and perhaps end up packaging together several insurance policies for you, lowering your insurance costs.

This being said, it is very important to shop around for your policies. Every company has different policies and prices, with different inclusions and exclusions. Finding one to suit your business can be a nightmare. Most small business owners use some variation of a Business Owner's Policy, a group of three types of protection, which is reliable, and useful for almost every possible type of small business. A breakdown of the three types is included below.

Foremost is Property Insurance. Property Insurance is for buildings that you conduct your business in, an example being the workshop of a furniture-refinishing business. This can include fire, break-in, theft, and any number of other factors, and can be customized with your insurance broker. It is very important to note that several destructive occurrences are not usually covered.

Flood damage is not covered, and should be looked into as a separate policy if your business is located in a flood plain. Earthquakes are not covered either, as a general rule, though some coverage may be purchased as an extra addition, if requested. Lastly, due to the Terrorism Risk Insurance Act, only businesses that purchase optional terrorism coverage are covered from losses originating from a terrorist attack.

Secondly, we have Business Interruption Insurance, which covers costs associated with a disruption of the running of your business, such as a fire in your primary business place. Such a policy may or may not cover the costs of operating at a temporary location. Again, you should check with your insurance broker.

Lastly, but perhaps most importantly in our society, is Liability Insurance. This covers the legal responsibility for harm that your company may cause to their customers or the general public. This harm is a result of actions or inactions of you or your employees do in your business operations that cause bodily injury or property damage from use of your products and/or services.

It is important to note that Business Owner's Policies (BOPs) do NOT cover professional liability, automobile insurance, Workers Compensation or health and disability insurance. You'll require separate insurance policies for coverage of employees, vehicles, and other assorted services.

For professionals, additional coverage is required in the case of a product they have created not meeting the requirements of their particular trade. For example, a mason who builds a wall, only to have it collapse within the year due to poor building would require additional coverage. Professionals are expected to have training, both practical and academic, in their field, and be able to perform their jobs according to the standards of their industry. Failure to perform in such a fashion can result in being held responsible for and damages to persons or property in a court of law.

This can be looked after by obtaining a specialty insurance, called Professional Insurance. Such a policy is a good idea for automotive repair shops, masons, welders, electricians, plumbers, and most highly specialized trades. Ask your broker if Professional Insurance is a good investment for you. This is under the heading of specialty insurance, and very few, if any BOPs include it.

If many of your customers deal with you through a single employee, Key Employee Life Insurance may be for you. This is designed to insure losses that a caused by the death of a key employee, such as your manager. When suppliers, customers, and the upper management all converge to get information from one person, you would consider this person a key employee. If this person were to become disabled or to die, Key Employee Life Insurance compensates the business against significant losses that would result. Again, this is specialty coverage, so ask your broker about it.

In the end, there are far too many types of business insurance to list in a short article. Most types only cover small pieces of your business, and as such, the expertise of a licensed insurance agent is absolutely essential to making sure all your needs and vulnerabilities are dealt with in an efficient and cost-effective manner.