What Risks Do I Face As a Start-Up?

What types of risk do I really face as a business owner, especially just starting out?

This question speaks to a number of articles we’ve shared in the past.  Frankly, the question really boils down to this, “Why do I really need business insurance, especially as a start up company?”

I mean really, isn’t that the real question behind our title?  Don’t you really want to ask that same question yourself?  What follows is a list of real scenarios documented with insurance carriers across the country.

As you read through this article, I am sure you’ll run across enough to make you say, “Ahhhh, I get it now.”  Let’s get started and look at some possible situations and decide if you and/or your business may be exposed to these types of risk:

One of your employees is interviewed by a publication without your knowledge.  In the interview, your employee refers to a competitor as, “A sleaze ball who gouges his customers every chance he gets.”  That competitor immediately sues you and your business.

You walk into your office the day after your grand opening and discover the back door wide open and all your computers and phones are gone.

You old toaster oven causes you’re newly leased office and the building to burn down.

You meet prospective clients for lunch, one has to leave and you volunteer to give the other a ride home.    Driving back to their office, you run a stop sign and get hit by another vehicle in which everyone involved gets seriously injured.

A customer  walks into your store, slips on a just mopped floor and breaks their ankle.

Forty-five days into your retail store being opened, vendors start calling demanding payment on bad checks.  You discover your bookkeeper made deposits to her account and has now disappeared.

Are there risks assumed the minute you start a business? Absolutely.  Getting business insurance in place must always be a priority for a new business.

Your licensed insurance professional can work with you to determine what coverages you need go ensure that you are covered completely.

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Insuring a Restaurant or Bar

Commercial restaurant insurance covers restaurants, bars, doughnut and coffee shops, pubs, bistros, delicatessens, and more.  A good commercial restaurant insurance policy should cover employees, buildings and equipment, loss of income, liquor liability and general liability.

Owning and running a restaurant comes with plenty of headaches.  Don’t let your commercial restaurant insurance be one of them.  Having a good commercial restaurant insurance policy in place will reduce stress and worry down the road.  One factor is certain in running a restaurant; the risk exposure regarding liability is higher than many other types of retail businesses.

A restaurant insurance policy needs to provide coverage for a variety of risks.  The policy should cover employment practices liability, valet liability and liquor liability.  There are a number of coverage options with varying limits and deductibles.  Talk to your licensed insurance professional to review what is available.  It is important to insure if alcohol is served that liquor liability is included.

This insurance will protect the business if a customer gets intoxicated and causes damage or injury to themselves or others.

In addition to these unique coverage options, your restaurant insurance should cover workers compensation, property, and general liability.  Other specialty coverage that is available includes plate glass and signage.

If you have fine art displayed, there is coverage available as well as parking lot and valet insurance.  The commercial restaurant insurance policy should also cover food-borne illness.  Business income insurance is also an option to be considered by a restaurant owner.

Talk to your licensed insurance professional about whether a business umbrella policy makes sense to further reduce the risk of financial ruin from a liability damage lawsuit and award.

The restaurant business is a complex business.  Make sure you discuss the distinct aspects of your business with your licensed insurance professional so they can help you determine the appropriate coverage and deductibles to customize your restaurant insurance policy.

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Know the Exclusions In Your Business Insurance Coverage

Insuring your business is one of the most important things you will do as a business owner.  The peace of mind which comes with having insurance in place to protect your business is very rewarding.  What’s just as important, is knowing that your insurance will do what you believe it will.

A term important for you to understand is exclusion.  Almost every insurance policy will have exclusions written into them.  For instance, most general liability polices for business exclude professional liability.

While the general liability policy is written to cover bodily injury, personal injury and property damage, as well as some types of advertising injury, something is missing.  It doesn’t cover claims against professional failure of performance or negligence of professional standard.

One lawsuit relating to professional liability can devastate a business.  Professional liability insurance or errors and omissions insurance is needed to protect against this exclusion of coverage.

Another exclusion generally found in a general liability policy is unfair or discriminatory employment practices.  This includes hiring and termination claims as well as disciplinary, job title and responsibility changes, and charges of harassment.  Again, separate employee practices insurance is needed.

Property insurance will also have exclusions written into them.  For instance, flood damages are generally excluded.  Other weather disasters such as wind may also be excluded and need separate policies written such as flood insurance.  Debris removal and business interruption insurance often aren’t covered.

Take a close look at your commercial business insurance and look for exclusions.  If you have any questions, talk to your licensed insurance professional.  Have them point out exclusions and coverage options available if needed for your business.  Then, you are able to really have peace of mind.

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Product Liability Insurance: For All Businesses?

We often hear this question: What’s product liability insurance and do all businesses need it?

If your business is a retail or internet provider of goods and services, or if you make and deliver products through distribution, you should consider purchasing product liability insurance. This coverage will protect you and the business from claims of damage caused by your product or its use.

Product liability insurance will cover against claims of damage from goods, foods, medicines or other products sold and used by the public. This insurance covers manufacturers, distributors, suppliers, and retailers in the event of a claim. It’s important to note that claims of damages or injury may come from product defect, packaging, design, labeling, storage, or handling of the product.

It’s important for a retail business or supplier to remember that they may handle hundreds or thousands of different products and claims can be brought against them even though they didn’t manufacture the product. Your business may be part of ‘the stream of commerce’ which will hold your business liable for a ‘part’ of a claim.

Work with a licensed insurance professional to determine the specific coverage needed. In most cases, a million dollar limit is considered the minimum that should be carried and what options are available to best protect your business.

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