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Small business Insurance
Written by: Joe CooperArticle Overview: How to prepare your business for the Insurance coverage that will be required to obtain funding and continue operations on a day-to-day basis.
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Small business Insurance
When applying for a small business loan private lenders could require that a Key-person Insurance policy is in place making the lender the beneficiary until the loan is repaid. This insurance requirement acts as an extra security blanket for the working capital provided.
While business property and liability insurance is necessary, you're not legally obligated to have them, however employers must provide state-mandated coverage's for injuries and illnesses that are job-related through workers compensation insurance.
Property insurance can be purchased on the basis of the property's actual value (the replacement cost minus depreciation), its replacement value (the cost of replacing an item without deducting for depreciation), or on an agreed-upon amount (commonly used for art objects and other unique items).
Optional coverage can insure against earthquakes, floods, building collapse, and glass breakage. Property insurance can be categorized by what is insured and by the events leading to a loss.
Liability insurance will protect your business assets in the event you are sued. You should maintain a proper amount of liability insurance to protect the business you've worked so hard to build. Liability insurance will not only pay the cost of the damages but also the legal fees and other costs associated with your defence in a lawsuit, regardless of whether or not the lawsuit has merit.
Liability insurance will not protect you against claims arising from non-performance of a contract, wrongful termination of employees, sexual harassment, or race and gender lawsuits. Usually a surety bond is taken out as performance insurance. Employment practices liability insurance protects your business against employment-related claims, such as sexual harassment.
Some occupational licenses might require a set amount of liability insurance. If you rent your business property, check your lease, as it could require a set amount of liability. Then buy what you can reasonably afford, because the cost of the insurance will be far less than the cost of a lawsuit.
Many insurance companies have bundled property and liability coverage into what's commonly called a business owners policy. It allows you to obtain broad coverage with affordable premiums.
The loss of a key person can be a major blow to a small business if that person is the key contact for customers and suppliers and the management of the business. Loss of the key person may also make the running of the business less efficient and result in a loss of capital. Key employee life insurance pays a death benefit to the company when the key employee dies. The policy is normally owned by the company, which pays the premiums and is the beneficiary.
One of our network members of Insurance professionals can provide invaluable advice to help protect your business from unexpected disasters. Ask what you can do to both reduce risks like fire or work-related accidents, as well as the procedures that should be in place in case your business does suffer a major catastrophe. Having the right coverage and a well thought out disaster plan can save you money in the long run. It may even save your business from going under.
Few things in life are riskier than launching and running your own business. You needn't compound that risk by neglecting your business insurance needs.
Clients can go to www.fundsandloans.com select “Business Insurance” and then a State; from that point they will be able to contact a pre-screened Independent Business Insurance agent that is a member of the exclusive network.
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