There are essentially three kinds of insurance available that can help you protect your business: liability, property, workers’ compensation.

All 50 states require businesses to have workers’ compensation insurance, while property and liability are not always mandatory. It makes a lot of sense, however, to protect your company with as much insurance as possible; after all, it is your livelihood.

Business Owner’s Policies

Insurance packages that offer both liability and property insurance for one premium are known as Business Owner’s Policies (BOPs). Most small and medium sized companies can attain a BOP and usually are more affordable than purchasing the policies separately.

Larger companies are typically considered a higher risk, so they don’t usually meet the criteria for a BOP. Whether or not you are eligible for a BOP will depend on the size of your premises, the limits of liability you need, the type of business you run, and the extent of your offsite activities. Your premium will be based on these types of factors as well.

Coverage of a BOP

A BOP will provide property coverage for your building as well as its contents and the property of others who bring items into your business. The policy will include standard peril – fire, theft, etc. – though certain exclusions may apply, such as flood or earthquake damage.

You will need to determine the amount of liability coverage you need based on your assets. Your liability coverage will help pay for your defense and injury or property damage should someone sue you. This policy will also pay medical expenses for individuals not employed by you who are injured as a result of your business operations.

A BOP will also cover you for business interruption and replacement costs in case your business is destroyed or you are unable to keep the business running due to medical difficulties, injury, or death. This coverage will continue to pay operating expenses – like payroll – even if your business activities have ceased.

You may purchase additional coverage for any particular risk your business may carry – for example, if you own a business that relies on special equipment, you can add coverage to protect it specifically.

Making Sure You’re Covered

Be sure you make a list of ALL your company’s assets – equipment, inventory, property – as well as how many employees you have, and any other relevant information specific to your business so you can take it to your insurance agent who can help you determine how much coverage you need.

It’s a waste of money to have too much insurance, but too little and you may find yourself in serious trouble should disaster strike!

As a business owner, the level of insurance coverage you obtain is completely up to you; you, of course, will want to be sure you are adequately protected, while not paying for insurance that has no relevance to your business.

Take into consideration the following when deciding on the best coverage for your unique business:

Size:

Often, businesses will begin small – you may even have started your business from your home or garage. When entrepreneurs work from home, they often assume that their business assets will be protected by their homeowner’s policy; this is not, however, always the case. You may want to consider looking into “work-from-home” insurance policies. This type of insurance will be tailored to small, start-up businesses and have the basic level of asset and liability insurance. These policies are usually quite inexpensive.

Be sure to review your policy as your business grows to be sure you have the coverage you need. If you employ someone, your liability level increases; there is always a risk for human error, so you need to protect your customers as well as yourself and your employee(s). Workman’s compensation insurance is legislated for full-time employees in most states.

Type:

Businesses in different industries will carry varying levels of risk; naturally the insurance coverage should be tailored accordingly.

A good example is restaurants and bars: They have high volumes of people come through each day meaning that they need to have insurance that will cover equipment, food, customer and product liability, workman’s comp, and property insurance at the very minimum.

A manufacturing business won’t need to have food spoilage coverage, however they carry greater risks in terms of property, equipment and product liability as well as higher workman’s compensation risks. They would need more insurance in these areas, than, say, a completely service-oriented business such as a cleaning service.

Assets and Perceived Risks:

Consider the following two factors to determine the level of insurance you need:

Your assets – you’ll want to ensure you have your assets protected so you can continue to generate an income should your business have difficulties. This type of insurance is called business interruption and shouldn’t be overlooked.

The risks – the industry of your business or the region in which you conduct business may be susceptible to certain risks; find information from local industry associations or colleagues to help assess your insurance needs.

Entrepreneurs Need Health and Disability Coverage

Health and Disability Insurance for the Entrepreneur

One of the greatest concerns a self-employed entrepreneur has is finding affordable health insurance and often, as well, disability coverage. There are myriad decisions to make and a vast number of insurance companies to research. One way to research the companies in your area would be to call and request a benefits and coverages booklet so you can take a look at what they have to offer at your leisure. You could also look to the Internet to do this type of research.

Be sure to research the companies for a variety of issues such as the following:

1. Annual premium
2. Costs of policies with higher deductibles
3. Costs of policies with lower deductibles
4. Drug coverage benefits
5. Hospitalization
6. Dental and/or vision benefits
7. Waiting period for pre-conditions
8. Co-payment(s) for office visits

A business owner needs to also strongly consider purchasing disability insurance; like unemployment benefits, disability is not automatic for an entrepreneur. But the coverage can be essential in covering expenses should you be unable to pay them yourself. An individual policy can cover many options and help you immensely in the face of a disaster that renders you unable to work and run your business.

A disability policy needs cover the following:

1. Coverage of most/all daily expenses
2. Coverage of most/all routine monthly bills
3. Coverage of most/all auto payments and insurance premiums
4. Coverage of most/all weekly/monthly groceries and transportation costs

Be sure you shop and investigate costs and coverages as much as time allows to find the best insurance at the best rate. You never know when something might happen; you want the best coverage possible, just in case!

Understanding Health Insurance Selection Process

1. DOES YOUR PLAN COVER YOU ON AND OFF THE JOB?

Numerous health insurance plans have specific exclusions that eliminate your benefits for anything that could have been covered under Workers Compensation or similar laws. Now read that last sentence again.

COULD HAVE BEEN covered!?

That is correct. Most self-employed individuals and even some small business owners do not carry Workers Comp on themselves.

There are insurance policy plans that are designed to cover you on and off the job 24 hours a day, if you are not required by law in your state to have Workers Compensation coverage.

2. ARE YOU WRITING IT OFF?

Independent contractors (1099s), home-based business owners, professionals, and other self-employed individuals generally are not taking advantages of the tax laws available to them.

Numerous individuals who are paying 100% of their own costs are able to deduct their monthly insurance policy payments and just don’t know it. This alone can reduce your net out-of-pocket costs of a proper plan by as much as 40%. Ask your accounting professional if you are eligible and/or check out the IRS website for more information.

3. INTERNAL LIMITS

All true insurance plans use some form of internal controls to determine how much they will pay out for a particular procedure or service. There are two fundamental methods.

Scheduled profits

Many plans, some of which are specifically marketed to self-employed and independent individuals, have a clear schedule of what they will pay per doctor office visit, hospital stay, or even limits on what they will pay for testing per 24-hour period. This structure is normally associated with “Indemnity Plans”. If you are presented with one of these plans, be sure to see the schedule of benefits, in writing. It is essential that you understand these types of limits up front because once you reach them the company will not pay anything over that amount.

Usual and Customary

“Usual and Customary” concerns the rate of pay out for a doctor office visit, procedure, or hospital stay that is based on what the majority of physicians and facilities charge for that particular service in that certain geographical or comparable area. “Usual and Customary” charges represent the highest level of coverage on most major medical plans.

4. YOU HAVE THE ABILITY TO SHOP!

If you are reading this, you are plausibly looking into purchasing a health plan. Every day individuals shop for everything from groceries to a new home. During the shopping process, generally, the buyer evaluates all the value, price, personal requirements and general marketplace. With this in mind, it is very disconcerting that most people never ask what a test, procedure, or even doctor visit will cost. In this ever-changing health insurance policy market, it will become increasingly primary for these questions to be asked of our medical professionals. Asking about price will help you get the most out of your plan and reduce your out-of-pocket expenses.

5. NETWORKS AND DISCOUNTS

Almost all insurance plans and benefit programs work with medical networks to access discounted rates. In broad strokes, networks consist of medical professionals and facilities that agree, by contract, to charge discounted rates for services rendered. In Numerous cases the network is one of the defining attributes of your program. Deductions can vary from 10% to 60% or more. Medical network rebates vary, but to secure minimum out-of-pocket expenses, it is imperative that you preview the network’s list of physicians and facilities before committing. This is not only to secure that your local doctors and hospitals are in the network, but also to see what your options would be if you were to need a specialist.

Ask your agent what network you are in, ask if it is local or national and then find out if it meets your own personal claims before you buy!

Home-Based Business Insurance Decisions Are Important

When you are just beginning your home-based business purchasing insurance coverage for yourself and your family may not be one of your priorities but it is unwise not to make it such. If – or more likely WHEN – disaster strikes, having insurance will make the difference between your business’s success or its failure.

Though you may not require every type of insurance listed here, take the time now to consider your insurance needs; it will save you money as well as headaches down the road. Ultimately, the best way of determining your needs is to consult with an insurance agent. Explain the details of your business to him or her; he or she will then be able to determine what the best coverage will be for you and any employees you may have.

Health Insurance:

Your first consideration should be health insurance. If you have recently left an employer, you might be eligible for COBRA, which can provide temporary interim health coverage for those who are between jobs and would otherwise be without insurance.

Disability Insurance:

Disability Insurance guarantees that you will have some amount of income if you suddenly become unable to work due to an accident or illness. Individuals often feel that the peace of mind they receive from having this type of insurance is well worth the cost of such a policy.

Life Insurance:

Life Insurance ensures your family has money if you die suddenly. There are lenders who require you to have life insurance prior to lending you money; this guarantees repayment of the loan should you die unexpectedly.

Business Property Insurance:

Business Property Insurance protects you should you have a loss of inventory or equipment. If your business suffers loss due to flooding, fire or another disaster, business property insurance allows you to recoup your losses.

General Liability Insurance:

You will need to have General Liability Insurance for your business if you plan to have customers or clients come to your home. This type of insurance protects you should someone visiting your home be injured while on your property. It will typically pay your legal defense fees as well should you be faced with a lawsuit as a result of the injury.

Business Interruption Insurance:

Business Interruption Insurance helps your business recover from natural disasters by covering the income you would lose and paying the operating expenses that continue to accrue during such a time of crisis.

Workers’ Compensation Insurance:

Workers’ Compensation Insurance is absolutely necessary if you plan to have employees. Without it, you would be responsible for the medical expenses that arise from injuries sustained by your employees while working. Mistakenly, many business owners believe that they only need workers’ compensation insurance if they are employers of “dangerous” workers (construction workers, electricians, etc.) or if their employees work at a commercial office or retail location (somewhere other than their home).

These types of insurance will help ensure that you are prepared for any type of accident, disaster or crisis that may come your way as a business owner. By preparing yourself, you will save yourself and your company from significant financial loss in the end.

Travel Insurance

The key salesperson for your firm has an important client meeting and the flight, hotel, and other necessary travel plans have been made – more than $3,000 worth of plans that is. But something has happened and the trip must be cancelled; then what? Are you simply out $3,000 or can you count on business class tickets being refundable? Can you be certain that travel “waivers” offered by travel agencies will protect your company’s investment? The unfortunate answer is a resounding “No!” While you can hope for the best, you can’t be assured of the best outcome when it comes to refund promises and waivers. They are, unfortunately, quite poorly regulated and are typically applicable in only very narrow sets of circumstances.

Purchasing travel insurance is a way to manage the risk of changing expensive business travel plans. You can also add other coverages to a policy to provide the traveling employee with security.

Travel insurance can be purchased on a per trip basis or can be bought to cover all trips made by employees during a certain period of time, typically one year. These policies are designed for the businesses that send employees overseas frequently, particularly to rugged, less developed areas.

There are essentially five categories of travel insurance:

1. Emergency Medical Evacuation: This will provide the traveler with enough money to cover the cost of evacuation or transport to a medical facility if needed.
2. Travel Medical and Major Medical: Travel Medical insurance will cover the traveler for medical care needed during short-term trips. If necessary, this insurance will help the traveler find a doctor or hospital and assist with any language barrier as well. Major Medical provides coverage for longer-term travels.
3. Trip Cancellation: This will cover the expenses incurred when a trip is canceled. This coverage should be as broad as possible, expanding to cover cancellations for “any reason” if possible.
4. Accidental Death-Flight Accident: This travel insurance provides benefits to beneficiaries of the traveler should he or she die on the trip as the result of an accident or plane crash. This is quite similar to life insurance.
5. Luggage and Personal Belongings Coverage: Coverage is provided in the event that the traveler’s luggage or personal belongings are stolen, lost, or damaged during his or her trip. Always be sure electronics are included in this coverage as laptops and other equipment can be quite costly to replace.

Business Insurance

There are, as most of us are aware, myriad types of insurance to consider when thinking of what type is right for your particular business, some, of course, being more important than others.

Some common forms of business insurance include:

1. Worker’s compensation
2. Malpractice and errors and omissions coverage
3. Disability insurance
4. Liability insurance that covers premises, activities, and products
5. Business interruption insurance
6. Unemployment insuance
7. Surety and performance bonds

One particularly important type of insurance is Worker’s Compensation; any business that has employees is required by law – in every state – to have Worker’s Compensation coverage; this type of insurance will benefit an employee who becomes injured on the job while performing the requirements of his or her position. In most states, Worker’s Compensation insurance is available through private insurance companies, but in a few, the coverage must be purchased through an agency of the state’s government. Oftentimes, there are contractual requirements that mean businesses must carry certain types of insurance. You will need to personally find out what the requirement of your state is.

Disability insurance and unemployment insurance are also types of coverages that are required by law. Each state, of course, will have varying requirements, so it is best to check with your insurance company or government office to determine your business’s exact needs when it comes to these required coverages.

When entering into a contract or lease, your business should carefully review them for any insurance requirements; if a business borrows money, it is often required that insurance must be maintained in an amount sufficient to cover office equipment leases, property, and liability exposures. Should you fail to acquire the necessary amount of insurance, your contract or lease could be terminated.

It is generally advisable that businesses purchase liability insurance to cover any business-related activity and be specifically tailored to the type of business you’re conducting. Professionals who are likely to face greater levels of legal liability, such as architects, engineers, dentists, and healthcare workers are especially advised to obtain business liability, or malpractice, insurance.

Whether or not you need a particular type of insurance will depend on the activities of your business as well as the amount of liability exposure that your particular company is likely to have. It is always best to contact your business’s insurance company or a local provider of insurance to assure you have all the coverage you need.

The type of life insurance you choose to look at will, of course, depend on your specific need. Every kind of life insurance certainly does not fit each of our situations. Business owners need a particular kind of life insurance specific to the fact that they own a business. This is different than a policy written for a husband and father, a single parent, a college student, or any other individual who doesn’t have ownership in a business.

What is Life Insurance for a Business Owner?

No matter what type of business you may be in, life insurance should be at the top of your list of important financial obligations. In a corporation or partnership, each shareholder or partner would need life insurance. The survivors would use the life insurance to buy out the shares of the shareholder or partner who has died. This level of executive would typically look at level term policies initially, usually then converting them to permanent policies down the road if they intend to continue running the business for an extended period of time.

Another popular life insurance with many businesses is what’s called “key man” or “key employee” life insurance. This involves buying a policy on an employee, partner or other key individual whose death would greatly affect the company’s continued operation. This type of insurance provides sufficient funds to keep the business running until a suitable replacement for this individual should he or she die unexpectedly. Long-term level term insurance can be used for this type of policy, though permanent insurance is sometimes used as well. This would provide this employee with a lump sum or additional income when he or she retires.

Whatever life insurance you find to be best suited for you as a business owner, it is important to realize this is not an option, but a necessary expense to guard your business in the event of your or another important individual’s death.