When looking at insurance policies that protect your small business you will want to ensure that the following points are addressed.
Professional liability. Every time you practice your profession you run the risk of being sued. Worst of all, being right can be just as costly as being wrong when you take into account the high cost of defending yourself. Whether you're employed but periodically take on a project after hours, work full-time as an independent consultant, or a partner in a small firm, professional liability insurance is a must.
Home office, property, and business interruption. Your homeowner's insurance policy usually will not protect you, your office or your business equipment if you're establishing an office in your home. The typical homeowner's policy provides limited or no coverage for your business property, and no coverage for the income your business produces or lawsuits resulting from your business operations. In evaluating coverage for these needs, make sure you fully understand the terms of the insurance, including any limitations or waivers of coverage.
Of course, if you are operating from a location other than your home, you will also need protection for your business property, interruption of your business operations, and liability claims not related to your practice, such as if someone fell in your office making a delivery.
Key Person. If your business couldn't continue in the event of your or a partner's death, key person insurance can help. Banks or government loan programs often require this type of policy.
Officer and director. If you are forming a corporation, the officers and directors can sometimes be held personally liable for what they do on behalf of the company. This type coverage exists to protect against this type of liability.
Automobile. If your company owns automobiles, you obviously need to provide insurance for them. However, if you use your personal vehicle on company business, you may need special insurance called non-owned automobile coverage or business use coverage. This policy covers the business' liability for any damage that may result for such usage.
Health, disability, and life policies. You can't afford to overlook the basic kinds of insurance every individual or family needs to get by in today's world: major medical, disability income, and life insurance. If you have one or more partners, you may be able to enrol in a small employer group plan that provides these kinds of insurance expressly designed to meet the needs of small firms.
In purchasing insurance for your small business, you will need to carefully consider your needs, liabilities and risks. Don't be afraid to ask questions when you meet with an insurance broker or agent. As a small businessperson, no one will expect you to know everything about insurance, and it's better to ask a hundred questions before you buy your policies than to buy policies you do not understand and cannot use effectively. Remember that insurance will be essential to your business, so take your time to review policies and guidelines, and talk to your agent or broker about any concerns you may have.
