Anyone who starts their own business may be startled to discover the different types of insurance policies that are out there. They all cover different aspects and contingencies, and it can be hard to know where to start. This article sets out some basic things to consider, with general tips at the end.
There is a difference between being insured and being bonded
To the untrained eye they may seem the same, but there is actually a wide difference between the two. According to the professionals from SwiftBonds.com, business owners should consider getting both, to protect their business partners and potential clients. Insurance is all about the risk of something happening being shared so that no one person sinks beneath the crisis. Bonding doesn’t assume there will be a claim on the underlying contract or that there will be losses.
The property needs insuring
Property insurance can protect an office or warehouse from the impact of such things as fires, theft or weather damage. An inventory is taken in advance of the building’s contents, and they will be replaced after such an event. If it is a car garage, the clients’ cars would also be covered if they were kept onsite.
When it comes to buildings insurance, one tip is to check any landlord’s insurance, as some things may already be covered there.
Casualty insurance may already be included in these policies, but if not it is needed to cover financial losses while any property is being repaired or rebuilt. Such policies can also cover loss of income due to such things as a coup in a politically troubled country.
Some people may be unable to work due to illness, and receive insurance payments to cover this. Business overhead expense policies acknowledge that during this time, the premises still have to be rented or a mortgage paid. Such contracts can be taken out to cover all the related bills during this season.
Think liability and consider health issues
Supposing someone is injured on the work premises, or a computer belonging to a client is damaged on site. General liability insurance will cover this. What about cases of error, malpractice or negligence claims? Professional liability insurance is designed for this. If someone is hurt because of a faultily wired appliance, product liability insurance will be needed here.
It may be seen as an expensive option for an employer to cover their employees’ health. Having said that, it could be the bait that secures quality staff. People will be very interested in working for you if they will have optical, dental or medical cover supplied with their contracts.
Workers’ compensation policies can reassure employees that if they are injured when working onsite or elsewhere, a payout will be granted. Disability insurance helps anyone unable to work to receive an income, either for a limited time or long term.
Consider all the angles
If one employee is the pillar of the company, their death or disability could spell disaster. Key man insurance will provide a financial buffer for the business whilst it accommodates this change, and looks for a replacement employee.
A similar situation could be the death or disability of a key shareholder. A lack of their financial contribution could create waves that only a shareholder protection policy can smooth.
The issues with personal insurance
Someone working from home may feel their home insurance will cover every aspect of their work. This is not actually the case. These policies are not liable to cover business expenses and issues.
Personal car insurance is not designed to cover business use. Insurance companies would question why a private car was being used in such a way. Commercial auto insurance policies are the answer here, covering both the vehicles, staff and equipment.
General tips
People are unwise to sign up to the first insurance policy they see. It’s good to shop around, and check the contracts side by side. Take a close look at the small print. This brings us to the value of employing an insurance broker who will fully understand the contracts available.
Some businesses join industry associations who can offer the added benefit of discounts on insurance policies. If someone buys a set of policies from the same company, there may be money to be saved here as well. It’s worth checking out business owner’s policies for this purpose. The policies secured need to be tailor-made for the type of business, the services that are provided and the number of employees involved.
As we can see, an all-round set of policies are needed in order to cover a host of situations. Once in place, unfortunate events can become less stressful, enabling businesses to ride the storm and continue to grow and prosper.
