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.

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.

Though most of us have extensive time constraints with all we have going on with our business and family lives, it’s important to spend time to getting the insurance quotes necessary to make the best possible choice. In the long run, it will be worth the time spent – you will get the coverage you need at a price you can and are willing to pay.

Most of us believe that comparing insurance is all about finding the best possible price, however, this isn’t the only reason, and often isn’t what you should be focusing on. Because the plans each company will offer are slightly different, you should first look for a policy that will provide the coverage you need. When you’ve determined what you’re after in an insurance policy, be it health, life, liability, or any other type you might need, look for quotes for your specific coverage needs; you will then have the opportunity to compare the costs of each and see which will offer the lowest prices.

It is best to take your quotes into a licensed agent who will be able to ensure you get the coverage you need and may actually try to beat the cost of the quotes you’ve provided. Keep in mind this is what the agent is trained to do and will know the ins and outs of the various types of insurances and coverages they will provide, so once you’ve done the preliminary work, it’s best to let him or her do the rest. You can then rest easy knowing you will have the coverage your small business requires and any future financial devastation will be avoided because you’ve taken the time necessary to purchase the insurance you need.

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Most of us realize that running a small business comes with its share of risks often undermining the rewards of such an endeavor. Whether you’ve considered it or not, having your small business insured is imperative to its survival; should the unthinkable become a realization, it could easily be the downfall of your company. In many cases, it can be the downfall of you personally as well if you are not protected with the insurance you need to cover whatever disaster is at hand.

As you work your way to success, be sure you familiarize yourself with several types of insurance that are available that can help you protect your investment.

Worker’s Compensation

This is a type of liability insurance that will cover the costs associated with an injury of an employee hurt on the job. Worker’s Compensation Liability is essential if you have employees who work in a potentially risky environment or situations that can easily result in injuries. Medical expenses of even one injured employee could potentially take all your assets and any investment you’ve made into your company. Some states do require this type of liability insurance, so be sure you’re familiar with your state laws and follow the guidelines set forth for your protection.

Unemployment Insurance

Any business that has employees is required by every state in the U.S. to have unemployment insurance. In each state, how the benefits are paid, the amounts and limits differ slightly; be sure you research to find out the details of unemployment insurance in your particular state.

Product Liability

This insurance is crucial if you run a business that manufactures and distributes any products. Product liability will protect you against any costs that result from one of your products causing physical harm to a purchaser. Evaluate the risks involved with any products you produce or sell when looking into purchasing this type of insurance.

Errors and Omissions

E and O insurance is usually a necessity to businesses that provide a service to its customers. You will be provided coverage in a case of error, negligence, or malpractice, protecting your business’s assets. Some states require this insurance for certain professions; be sure you look into the requirements of your own state if your business offers services.

In addition to these basic types, there are a number of other small business insurances offered that can help protect you from profit and asset loss in the event of a tragic situation. Talk to a local agent about what insurance is the best option for your small business.

Photo Credit: ExpertBusinessSource.com

As a private contractor, if something goes wrong, the person who's running the business is personally liable. One way to avoid that is to use a limited liability corporation (LLC).

Video:  How to Protect Your Assets

As a business owner, one of your primary responsibilities is protecting your business, yourself, your employees, and your family against financial disaster by ensuring you have a business liability insurance policy.

Essentially, there are three types of liability insurance:

1. General Liability Insurance, which will cover any legal suit that is related to the business products or services as well as your business premises
2. Professional Liability Insurance, which covers professional companies – lawyers, advertising companies, doctors, etc.
3. Automotive Liability Insurance, which will cover individuals who drive company-owned vehicles. This type of policy insures for damages to the vehicle from an accident, injuries to the company’s driver as well as others who were injured during their involvement in the accident.

When you purchase liability insurance for your small business, it is imperative that you educate yourself about the available choices in order to make the best, most cost-efficient decision possible.

Here are some important things to keep in mind:

1. Look online to familiarize yourself with liability insurance; make notes of any guidelines that are applicable to you and your business.
2. If you choose to use an agent to purchase your insurance, be sure to find one who will take a look at your specific needs so he or she will be able to make the best recommendations possible.
3. Look to your Chamber of Commerce or trade or business association for bargains on insurance – often you will be able to get group rates saving you quite a bit of money.
4. Be sure you compare coverages – make a list of what you need to ensure the prices you are quoted will be accurate.
5. Looking for insurance online and off is a great way to be sure you are getting the best pricing available. Often, online directories will also provide comparison tools that can help you look at the various quotes and policies offered by different insurers.
6. Take a look at buying a Business Owner’s Policy – or BOP – that can provide insurance coverage in many areas. For this type of policy, you will need a specialist to be sure all your needs are met by adding necessary riders to your policy.
7. Be sure you are always up to date with any new developments in insurance law in your state. This could make working out a claim or renewing a policy much easier down the line.

Doing a background check and looking into an insurer’s reputation with the better business bureau is always a good idea once you’ve narrowed your choices down to just a few.

A top financial priority as a business owner should be the purchase of a life insurance policy. With so much at risk and no group policy to cover your family when they would need it the most, life insurance needs to be at the top of your list of business expenses.

As the owner of a business, you are ultimately responsible for protecting your family by protecting your business by insuring the most necessary part of that business – you. You may have the mind set that your business and personal life should remain separate, but you can’t delude yourself into thinking that your business will continue if you aren’t around to run it; this will likely leave your family in an extremely precarious position financially.

Your circumstances will vary greatly from other business owners, so sitting down with an experienced agent and your financial advisor to formulate the best insurance plan for you, your family and your business is highly recommended. Discuss your business as it is today, but also how you envision its growth over the coming years. Be sure you take a look at how you want to provide for your family in the event of your death.

The Importance of Life Insurance When You’re Self-Employed:

First and foremost, you will need life insurance to pay off the liabilities you’ve accumulated; if you don’t, the debt can become your family’s responsibility.

Next, your family’s personal expenses, should you pass, will need to be taken care of including your funeral, perhaps your mortgage, your children’s education, etc.

If you choose your life insurance wisely, you will provide your family with income and future business capital, not leave them with outstanding debt and no way of paying for household expenses.

Photo Credit: Leonid Mamchenkov on Flickr