Insurance for Small Businesses

No matter what size or type of business you own, you've no doubt made a major investment–one that's worth protecting.

Adequate business insurance is essential to help manage your risk and minimize the impact of catastrophic eventsÑsuch as natural disasters, business-related accidents or even terrorism.

Some insurance, such as workers' compensation insurance, is mandated by law. However, there are also a wide variety of optional insurance policies available to small businesses that protect against fire damage, vandalism, product failure (i.e. the skylight you installed collapsed onto the bedroom floor) and so on. As well as policies that offer health and other benefits to yourself, and your employees.

Insurance to Protect Your Business
Business Owner Policy
Many insurance companies bundle several types of business coverage, such as property, liability and business interruption insurance, into what is commonly called a Business Owners Policy (BOP). A BOP is usually more economical than purchasing a number of separate polices.

Property Insurance
As the name suggests, property insurance covers both real and personal business property. Types of insurance include:

• Building and Equipment Insurance–Compensates you if your building and/or equipment is damaged or destroyed.
• Valuable Papers Insurance–Provides coverage if documentation supporting your accounts receivable or other valuable business records are lost or destroyed.
• Crime Insurance–Protects you against losses from theft.
• Business Interruption Insurance–Replaces some or all of the profits you would have earned if your business is forced to close due to disaster-related damage, and covers all or part of operating expenses (i.e. payroll, taxes, etc.) during the closure.

Liability Insurance
Liability insurance protects you from lawsuits filed by customers and/or other third parties claiming losses due to your product or service. Types of coverage include:

• General Liability Insurance–The insurance company will pay third parties who claim they were injured or their property damaged by your product or service.
• Professional Liability Insurance–For those who provide professional services (i.e., lawyer, doctor, CPA), these policies protect you against liability for injury done to others due to your misconduct or lack of skill.

Key Person Coverage
The loss of a key person can be a major blow to a small business that, by its very nature, relies on the talents and abilities of a few people. Key person insurance can help compensate a business for financial losses due to the death or long-term disability of a key personÑincluding, but not limited to, the business owner.

Insurance to Protect Your Employees
In today's competitive business world, insurance is a key component to most employee benefit packages, however, there is no federal or state law that requires it. If you do decide to offer group health insurance–medical, dental, vision, life, disability and/or long-term care–be sure to shop around, and to file an information return with the IRS about your plan.

Workers' Compensation is a MUST!
Workers' compensation insurance, which provides compensation to your employees if they're injured at work or get sick from job-related causes, is mandated by law. It also protects your business from liability because once an employee opts to receive benefits under such a policy, the employee is usually prohibited from suing your business for the same injuries.