Business Insurance Overview

Like home insurance, business insurance protects the contents of your business against fire, theft and other losses.  It is prudent for any business to purchase a number of basic types of insurance. Some types of coverage are required by law, other simply make good business sense.

The types of insurance listed below are among the most commonly purchased, and are merely a starting point for evaluating the needs of your own particular business:

General Liability Insurance -- Businesses may incur various forms of liability in conducting their normal activities.  One of the most common types is products liability, which may be incurred when a customer suffers harm from using the business product.  There are many other types of liability, which are frequently related to specific industries.  Liability law is constantly changing.  An analysis of your particular liability insurance needs by a competent professional is vital in determining an adequate and appropriate level of protection for your business.

Property Coverage -- There are many different types of property insurance and levels of coverage available.  It is important to determine the  specific property you need to insure for the continuation of your business, and the level of insurance you need to replace or rebuild.  You must also understand the terms of the insurance, including any limitations or waivers of coverage.

Business Interruption -- While property insurance may pay enough to replace damaged or destroyed equipment or buildings, how will you pay costs such as taxes, utilities and other continuing expenses during the period from when the damage occurs until the property is replaced?  Business Interruption (or "Business Income") insurance can provide sufficient funds to pay your fixed expenses during a period of time when your business is not operational.
 
"Key Man" or "Key Person" -- If you (and/or any other individual) are so critical to the operation of your business that it cannot continue in the event of your illness or death, you should consider "key man / key person" life insurance.  This type of policy is frequently required by banks or government loan programs.  It also can be used to provide continuity in operations during a period of ownership transition caused by the death or incapacitation of an owner or other "key" employee.

Commercial Automobile -- A vehicle owned by your business should be insured for both liability and replacement purposes.  What is less obvious is that you may need special insurance (called "hired / non-owned automobile coverage") if you use your personal vehicle on company business.  This policy covers the business' liability for any damage which may result from such usage. 

Directors & Officers -- Under some circumstances, officers and directors of a corporation may become personally liable for their actions on behalf of the company.  This type of policy covers this liability.

The coverages above are but a few of the most basic insurance lines available for any company.  Other insurance lines that may be considered as your firm grows are Employer's Liability, Workers' Compensation (if you intend to hire employees), as well as Employee Benefit & Retirement programs.