Insurance Options For Your Business

Tricia Borren

April 10, 2014

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Businesses need insurance for a variety of concerns. A dissatisfied customer can sue you if they believe your services caused them a substantial financial loss. You also might be responsible for losses if customers say products they bought from you are defective. The type if insurance you get for your business depends on your industry and what you need or want to protect. In general, get insurance for anything that might bring your operations to a halt if you lost it. Also, get insurance to protect yourself and your business from financial lost.

General Liability Insurance
If you’re unsure where to begin, you can’t go wrong with general liability insurance. It protects you in cases when your products or services cause harm to your customers. For example, it pays for medical expenses and damages that result from accidents that occur on your property.

Errors of Omission Protection
An error-of-omission insurance policy is mandatory in states such as Kentucky, Mississippi and Tennessee. It’s prudent to get coverage that protects you - - regardless of your state laws. Errors-of-omission insurance policies protect your personal and professional assets if you make a mistake. This coverage is the same as malpractice insurance or professional liability insurance.

Property Insurance For Your Business
Just as you need insurance to protect your home, you need insurance to protect your business. Commercial property insurance protects businesses from a wide variety of perils. These might include events such as fires, vandalism, hailstorms, civil disobedience and wind. Property insurance pays assets your company owns, including buildings and computers. It reimburses you for loss of business if you must temporarily stop operating because a covered peril occurred. You can buy all-risk or peril specific coverage. Choose a coverage that offers you the most protection.

A Word About Home-Based Businesses
If you work out of your home, don’t assume that your homeowners insurance is enough to protect your business. Add riders to your homeowners’ insurance policy to make sure your business is covered. When you add a rider to your policy, it extends your policy coverage for the additional item. For example, if you’re a notary, you might want to add an errors-of-omission rider to your home insurance policy.

Can You Benefit From Captive Insurance?
If your current insurance policy has exclusions, you can create your own small insurance company. Your insurance company, or captive company, can cover risks that might not be available or might be too expensive in the commercial insurance market. You can include any risks listed in the exclusion section of your company’s regular insurance policy. In addition to risk management, captive insurance also provides other benefits. For example, you might be able to deduct the premiums when you prepare your annual tax return. More information about that is available from section 813b captive insurance laws.