The Consumer’s Guide to SMALL BUSINESS INSURANCE

If you own your own business or are a partner in one, you’re probably already familiar with risk. After all, few things in life are riskier than launching and running your own small business. Part of the risk of any small business is the loss of critical tools and property or liability to others, either of which can cause loss of income or even force you to close your doors.

Large companies employ full-time risk managers to keep their risk-taking to a minimum. But chances are that as a small-business operator, you are your company’s risk manager, along with its personnel director, office manager, and possibly the entire staff all rolled into one.

While juggling all the jobs that need to get done to make your firm a smooth-running and profitable operation, you may already be asking yourself, “Who has time to think about insurance?” You do! Keeping risks and losses to a minimum is a cornerstone of business success, especially for small businesses. Take a few minutes now to check your risk factors, find out your insurance needs and learn the many options available to you. And remember choosing the right Trusted Choice® agent is as important as choosing the right insurance.

This guide does not represent the provisions of any particular policy, but it can serve as a starting point to a complete package of protection.

• I’m just getting my business started. Do I need insurance right away?
• I don’t have any major business assets. Why do I need insurance?
• Is insurance coverage different for different businesses?
• What types of property do I need to insure?
• What types of property insurance should I consider buying?
• How much property insurance do I need to buy?
• Who decides how much my business property is worth?
• What kinds of events does business insurance cover?
• Everybody seems to be suing everybody else these days. What if someone sues my business?
• What about the cars and truck that I have in my business? Is the coverage like what I have on my personal car?
• Will I need to protect my employees in the event they are injured on the job?
• I keep one auto strictly for business. Do I need a separate policy?
• I just signed a 3-year lease to open my business. Why does my insurance agent want to see my lease?
• My business requires that I store gasoline on the premises. Do I have to have special insurance?
• I run a dry-cleaning business. What happens if fire destroys many of my customers’ clothes that were stored in the building?
• What if the clothes I manufacture are damaged in shipment. Does the shipping company reimburse me or do I put in a claim to my insurance company?
• I work out of my home. Will my homeowners insurance cover my business?
• What is coinsurance all about?
• As a retailer, do I need to worry about product liability?
• Now that my business is established, I think it is time to offer my employees some benefits. What do I need to know?
• Can I do anything to lower my insurance premiums?
• What should I look for in an agent?

I’m just getting my business started. Do I need insurance right away?

Yes, because the chance that you could suffer a loss begins with the first day of business. You can’t get help after the fact. If you suffer a loss and have no insurance or have improper or insufficient coverage, there is very little, if anything, your insurance agent can do to help you. You must be prepared for the risks that are inherent in any business and the losses, sometimes catastrophic, that they can cause. Also, many states and local jurisdictions require that businesses be insured to begin operating. And if you rent space for your business, your landlord probably requires that you be adequately insured as well. Return to Small Business Index

I don’t have any major business assets. Why do I need insurance?

Every business has some property. And, when you think about it, your business is your property. Just like your home and your car, your business needs to be protected from loss, damage and liability. In addition, your business is your source of income, so you need protection from the potential loss of that income.

Generally, there are two types of insurance – property and liability. Property insurance covers damage to or loss of the policyholder’s property. And if somebody sued for damages caused by you or your possessions (other than a vehicle covered by your insurance policy), the cost of the suit – both defending it and settling it if necessary – would be covered by your liability insurance. Return to Small Business Index

Is insurance coverage different for different businesses?

It can be. Many small businesses are now insured under package policies that cover the major property and liability exposures as well as loss of income. A common package policy used by many small businesses is called the Businessowners Policy (BOP).

Generally, these package policies provide the small-business owner more complete coverage at a lower price than separate policies for each type of insurance needed. Your agent can help you decide which policy or policies are right for your business. Additional coverage for property, liability or perils or conditions otherwise excluded (e.g., flood protection) can be purchased as endorsements to a standard policy or as a separate policies.

Because businesses vary, it is impossible to have a standard policy to cover all contingencies. Also, some businesses, regardless of their size, do not fit the profile of a standard businessowners policy. For example, restaurants, wholesalers and garages have special exposures that are not met in the standard businessowners policy. The Van Dyk Group can advise you of the best policy (or policies) to protect you and your business. Return to Small Business Index

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