Buying Business Insurance

Buying business insurance for the first time isn’t difficult if you prepare.

First, when beginning to look for business insurance, you need to remember it is different than your personal insurance you have now. You need to take some time and look at the different types of coverage that is available to your business. These types include general liability insurance, property insurance, casualty insurance, and commercial vehicle insurance. You don’t need to be an expert on business insurance, but you need to understand that property insurance protects the location, while liability protects against a claim against you or the business.

You need to understand what risks your particular business may be exposed to and what the future may look like as your business grows. If your business has an association, it is a great starting point. In fact, don’t be afraid to call around and speak to members to see what they have in place and why.

Have a business plan and detailed description in place which you can review with a licensed business insurance professional when you begin to look for the insurance. The more information you can provide, the better coverage you can put into place. Interviewing and choosing your insurance professional will be much easier and rewarding by doing this exercise.

It is also easier for your insurance professional to understand your business and the vision you have to make sure you cover as much exposure as possible. Don’t be afraid to ask for commitments from your insurance professional such as 24 hour turn around on phone calls. Get a standard billing date agreed on and make sure it’s the same every month.

Once you settle on and buy a business insurance package, don’t file it and forget it.

It is important to review it often and make you keep adequate coverage as your business grows. Make your insurance professional a trusted advisor and resource. Get together at least at least annually and do a complete review either in person or on the phone. Try and remember your insurance needs to grow with your business.

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Business Interruption Insurance Explained

Business interruption insurance covers your actual business from the loss or damage to your income due to a covered loss at your business. Business interruption insurance is best explained with an example.

Mary and Bob have an ice cream shop in a leased space downtown. The income is generated through take out treats as well as some sit-down business at their location. They have several freezers for storage and service, a storage area for paper goods, restrooms, and small retail area for their customers. The shop averages $700 a day and monthly is about $21,000 in revenue. The shop nets about $1500 a month not including salaries paid to both Mary and Bob.

A fire in the building destroys the shop. A commercial insurance claim is submitted to the property insurance. However, to maintain the space, utilities need to be paid, equipment loans paid, minimum orders are required by several vendors to maintain the business.

A contractor is hired, and new freezers and equipment ordered. Still, it will take 6 weeks or more to get up and running. No revenue is being generated, which also means Mary and Bob have no income. This is a tough scenario for Mary and Bob.

However, their commercial insurance professional added Business Interruption insurance to their coverage. This insurance will cover the loss due to time, quantity and other values.

Mary and Bob submit a claim based on actual business records of losing $31,500 in revenue and profits of $2250. Now, the shop has this covered as well as the property insurance claim, allowing them to get through to re-opening the business.

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Ask you licensed insurance professional if business interruption insurance is appropriate for your business. Many businesses are forced to close for good by not preparing for the down time and revenue loss.

What Type of Business Insurance is Right for Me.

What insurance is right for my business?

Choosing the proper insurance coverage for your business and minimizing the risk your company is exposed too can be a daunting task.  In this post, we‚ will address the typical coverage a business should carry and offer some insight into other coverage available to business owners.

It is important for a new or existing business owner to understand the language of commercial insurance. In addition, it is important to establish a relationship with your insurance professional.

Most small companies don’t have a full time risk assessment manager on staff to answer the questions or concerns of a business owner.  So lets start with the basic coverage needed by a business to protect the company.  Those three are Property, Workers Compensation, and General Liability Insurance.

Property insurance protects your business property and inventory against loss or damage by accident, theft, or another cause or by another party.  Often, your property insurance may be purchased in conjunction with your liability coverage.  These combined policies are often sold as Business Owners Policies or B.O.P.

Liability insurance protects the company against claims of injury either bodily or physically.  This would protect you in the event of an accident at your business or in another location where you or your employees are conducting business. As noted above, general liability protection is offered through a B.O.P.  In some cases, a business may also need professional liability coverage.  Discuss professional liability with your insurance professional.  Medical Malpractice Insurance is an example of professional liability insurance.

Almost every state requires workers compensation insurance.  This insurance covers medical and loss wages to an employee injured conducting company business.  It also protects the business from being sued by the employee.

In every case, sit and review your coverage requirements with your insurance professional.  Ask questions and learn what appropriate protection for your business is.

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