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The One Entrepreneurial Risk You Should Never Assume-Insurance Requirements of the Self Employed

Written by: Steve Little

Article Overview: Could your business survive an extended, forced shut down? If you don't have a plan that ensures your rent, utilities, payroll, suppliers and your own income can be payed even while your business is shut down for months the answer is no and your small business is at risk. Business Interruption or Loss of Income insurance bridges the gap between the businesses normal income and its income due to a forced closing. It also can assure certain business critical expenses will be paid.

The One Entrepreneurial Risk You Should Never Assume-Insurance Requirements of the Self Employed

The most successful business owners have a high tolerance for risk but there is one entrepreneurial risk you should never assume.

Talking about insurance ranks up there with my least favorite topics of all time and I bet you aren’t getting chills of excitement reading about it. Bear with me for a few minutes and this information could someday save your business and preserve your life as an entrepreneur.

I bet I have you hanging on my every word now-who said insurance couldn’t be exciting?

This topic actually hits close to home for me as I have had to evacuate my family from my home, where I run my business, twice in the past two years because wildfires were within a mile of our home.

Most small business owners carry liability, disability and property insurances. Property policies cover repairs to the physical structure and equipment in the event of damage from a storm or wildfire, but there is a critical insurance most small business owner’s neglect.

Business Interruption or Loss of Income insurance bridges the gap between the businesses normal income and its income due to a forced closing.

Loss of income insurance compensates for the loss of business income due to the business being forced to limit or cease operations. The cause of the loss of income can originate from the disability of the owner or key employee, a legal liability claim or loss of property-which might result from a fire, natural disaster, theft or vandalism.


Imagine if your business was located in St. Louis when Hurricane Katrina hit. Would you have been able to sustain your lifestyle if all of your business income disappeared overnight?

In addition to loss of income, business interruption covers ongoing expenses like lease or rent payments, utilities, taxes and some policies cover payroll.

Many small business owners who have experienced Mother Nature in the form of wild fires, hurricanes and tornadoes have learned their ability to survive, rebuild and reopen after a total loss was entirely dependent on their business interruption insurance.

The policies can be complicated, especially when determining the amount of income replacement. Don’t discount this insurance if your business is new or you haven’t made a profit yet. The policy will grow with you and may still cover your expenses.

Reduce your entrepreneurial risk. Do your research and consult with a professional and always remember to keep duplicate copies of your current financial records offsite.

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Article Tags: business income, business interruption, chills, gap, hurricane katrina, hurricanes and tornadoes, income business, legal liability, liability claim, loss of income insurance, mother nature, natural disaster, physical structure, property policies, small business owner, small business owners, successful business, vandalism, wild fires, wildfire
Referred by: http://dogbusinessdaily.com/blog



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