Guide to Small Business Insurance

Setting up a new firm is an exhilarating experience and can be extremely satisfying when it works. However, forming a new company also involves taking on a large amount of risk and responsibility, and those who employ people are arguably in a particularly precarious position as far as the ‘duty of care’ goes. Legal risks mean a big solicitor’s bill is always a possibility, so a small business insurance package could be a straightforward way of providing peace of mind.

There are several different types of cover which are used by firms to help guard against eventualities which would otherwise see them in financial difficulty. Forms of insurance most people will have heard of include public liability, employers’ liability, and tool and equipment insurance.

Some firms will not need protection for tools, while others may feel employer’s liability is not necessary. Many insurance firms will mix and match policies and tailor cover levels to suit your business. For those who need a wide range of protection due to the nature of their work, small business insurance is available as a package covering just about any circumstance you could think of, for a set fee.

Public liability insurance protects a company if an act of negligence on its part results in a member of the public being killed or injured, or ending up with damaged property. It applies if a member of the public mounts a legal challenge following the injury or damage. The cover will pick up the cost of defending this claim, whether or not it is valid or indeed successful. It will even pay any awards of compensation or costs, again up to limits.

Employers’ liability is the type of cover essential for anyone who employs someone. It will protect them if they face a claim from a worker who is killed or injured during their work due to an act of negligence on the part of the employer. It will also protect a business if it faces a claim from an employee whose property is damaged because of their work, or who becomes ill because of their job.

Tools and related equipment insurance protects against the loss or damage of important tools used in the general operations of the business. Professional indemnity will protect a firm if it is sued by a client following a mistake, omission, or act of negligence which results in a financial injury.

Protection is also available for things like business interruption, if you lose money because your business has ground to a halt due to unforeseen circumstances, plus stock insurance and personal accident cover. Small business insurance is therefore an essential umbrella to some of the common pitfalls of running a firm, and can often be bundled into a straightforward package for a reasonable premium.

Don’t Forget Your Small Business Insurance

If you run a small business or are thinking of starting a business, insurance is something you need to have. It doesn’t matter what type of work you do or industry you are in, you need to have insurance.

Just imagine what could happen if you didn’t have business insurance and something unexpected happens that means you have to pay out financially. This could be disastrous to your business and might mean that you have to stop trading.

Let’s say you are a Plumber who relies on your tools and your van. You are about to start a new important contract that is going to be worth a lot of money to you. On the day you are about to start you go outside and your van has been stolen with your tools and equipment in it.

If you had insurance you would be able to quickly claim back the cost of your van as well as your tools and equipment. If you had to stop trading for a while your business insurance may also cover the loss of earnings you might suffer.

If you didn’t have insurance you could suffer serious financial problems. You would have to pay for a new van and tools and equipment, you might also lose out on the contract you were about to start working, losing significant potential earnings.

By not having insurance it is a huge risk you would be taking. In some cases your customers or the people you work for will require you to have insurance so they are sure you will be able to pay any claim they might need to make against you if anything goes wrong.

Business insurance can cover a variety of circumstances and you can take out various cover options according to the needs of your business. You can usually buy a core package and then add extra cover that you think you might need.

Small Business Insurance Plan – The Basics

In order to compare small business insurance plans it is important to know what to look for in order to make sure you have the proper protection. Below we are going to talk about a specific coverage to make sure that it is included in your insurance policy. The best small business insurance proposals should include small business exposures from products and completed operations.

Whatever products or services that you manufacture, distribute, or sell, should have liability protection for these exposures. The coverage is called products and completed operations coverage. This provides general liability insurance protection for claims that happen off your premises and usually after you have left your job site.

Many states along with the federal government have very strict negligence and strict liability laws on the books. The limits that you choose are sometimes mandated by the laws in your given state. It is always best to confirm limits with your state’s insurance authority.

In summary, a small business insurance plan should include the products and completed operations protection in your insurance portfolio. Sometimes insurance company’s exclusions are embedded in the contract and can restrict coverage to only cover premises liability claims. Almost every business has some sort of products completed operations exposure and need this type of coverage. The specific coverage limitation endorsement the insurance companies use is usually described as “designated premises coverage”. Make sure that this coverage limitation is not on your policy as many claims can happen off premises as a result of the product or service that you provide.

Small Business Insurance – Who Needs It?

Who Needs Small Business Insurance, Anyway?

You do! Small business insurance is one of the most critical components of planning for your new venture. Whether your business involves working in a high-risk environment like heavy construction, or a relatively low-risk one such as running an in-home consulting business, you are continually exposed to liabilities that can put your business and your future at risk.

Some business owners are required to maintain insurance coverage. Restaurants, hotels, health care facilities…they all have minimal limits that are imposed upon them by their industry, municipal entities, or their landlords. But what about your small business? You may be retired or just starting out, maybe you’re considering using your knowledge of antiques or your talent as an artist to start your own shop or gallery. How risky can that possibly be?

Assess the Risks

In today’s world, risk management is no longer the exclusive domain of large corporations. Every small business is different, with a unique set of risks. An experienced small business insurance agency can advise you on what your present and future needs may be, and keep you up to date on any Federal, State, or Local regulatory requirements you may be subject to.

A good insurance agent will review your company needs; an excellent one will take the time to visit your company and discuss your requirements with you directly.

Be Prepared!

As your business grows, your small business insurance coverage should grow with you. It’s easy to get caught up in the excitement and activity as success begins to take root, and insurance is the LAST thing on your mind…until you need it. Make sure when you choose an agent, you are getting someone with your best interest in mind, who will continually monitor where you are and make suggestions when necessary.

Are you taking on employees? Opening another shop or office? Considering additional human resource programs? Taking on additional risk? You may need to look at several types of coverage:

Workers’ Compensation
Contractor’s Liability
License Bonds, Court Bonds, Performance or Fidelity Bonds
Employee Benefit Administration

The Benefits – Because Things happen

The benefit of having good small business insurance is most obvious when the unexpected happens.

Don’t be caught off guard…without proper coverage your business liability can extend to your personal life as well. Knowing you have the right coverage up front offers you both peace of mind and security. When and if you have a loss or a setback, you will be able to continue moving forward with confidence, and the tools you need to stay in business!

There is no doubt about it – Insurance can be complicated. There is so much to understand and so many details that it can quickly become overwhelming! The very best option? Find a qualified small business insurance agency you trust – one that is familiar with you, your local community and is respected within the insurance industry as well.

Give Your Business Insurance an Annual Checkup

Insurance isn’t just another expense–it’s an essential element of most businesses and, when properly managed, can make a positive contribution to the bottom line. Review every policy once a year to make sure you have the appropriate coverage at the best price.

Your benefits insurance (health, life, and other specialty coverages) and your business insurance should be examined separately but many of the same strategies apply. Start by asking your current agent to review your coverage and make suggestions for changes. Then ask another broker for a proposal. Bring in somebody fresh and different to see what’s new and what approach they might suggest.

The goal is to be aware of new products and packages so that you can make the best decision for your company and your employees. Getting a quote from a new provider helps you avoid broker complacency. Let your existing agent know you’re shopping; if he’s doing his job, he won’t mind–and if he’s not, you need to know. The idea is to do what’s best for your company and the employees, not necessarily what’s best for the agent.

Consider the demographics of your employee population and try to match the insurance you offer to their needs, but don’t be surprised if you can’t make everyone happy. If you have 10 or more employees, consider a cafeteria plan that will allow workers to choose the coverage they want.

Begin your business insurance review by meeting with your agent to assess the risks your company faces. There may be changes you aren’t thinking about that your insurance agent would. You should also evaluate the service and support you’ve received from your agent, broker, and insurance carrier.

Coverage areas to review include: property/casualty; liability; business interruption; technology; directors and officers; errors and omissions; life and disability coverage on key people; commercial vehicles and coverage for employees driving personal vehicles on company business; and workers’ compensation. Your coverage may need to be updated if you’ve had changes in your revenues, inventory or product lines; an increase or decrease in employees; or added or eliminated vendors.

Though every policy needs an annual checkup, it isn’t necessary to do it all at the same time. Schedule the reviews for different types of coverage throughout the year to keep the process manageable. Assign the responsibility for the review to someone who is genuinely interested in the issue and will be enthused about taking the time to do the necessary research and evaluation.