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!

Qualifying for Short-Term Disability

Oftentimes employees who need a brief break from work-related duties due to a particular medical condition or an injury are eligible for short-term disability benefits once he or she has depleted all of the sick leave to which he or she is entitled.

Many employers will provide their employees with short-term disability benefits of between 50-70% of his or her salary during the necessary leave of absence, however, larger employers may pay as much as 100% based on the employee’s length of employment. A typical short-term disability plan will pay benefits for a period of 13 to 26 weeks. This benefit will usually be computed as a percentage of gross weekly salary (without commissions, bonuses, or overtime).

One form of short-term disability is the Family and Medical Leave Act (FMLA) – The federal law provides job protection for those who must take time off for medical reasons. This law applies to all employees who are employed by a company with 50 employees or more in the “same geographical area.”

Basically, any employee who needs to attend to their own medical condition or take time off to care for a spouse, child, or parent for a medical reason is protected under the law if he or she was an ordinary employee working for an employer for at least twelve months or 1,250 hours in the most recent year.

A worker returning to his or her position after taking FMLA leave retains his or her job title, with the same benefits, pay, seniority level, and working conditions prior to the leave. The benefit is available for a maximum of only twelve weeks per year, but do not have to be taken consecutively.

Both state and federal short-term plans can offer income when you need to take a temporary leave from work, while at the same time they can guarantee the protection of your job and its entitlements.

To know more about the short-term disability benefits that may be available to you, a consultation with a short-term disability lawyer can provide you with the information you need.

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.

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.

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