How Much Insurance Do I Need?

How do I decide how much business insurance I need?

Insurance is to protect the assets of the business as well as the business owner and its employees.  Now matter what type of business you’re considering opening or are already in, you will need to purchase insurance coverage for protection.  Whether you have a retail business like a flower shop or a stationery store, a convenience store, you will have to protect yourself and your business.

If you have a service business like a consultant, an accounting office, web design, or an ad marketing agency, you will need insurance in place to cover the risk.  Any business will have exposure to risk and needs to have coverage in place in the event a claim is needed or brought against the business.

For a start up or small business consider a general liability policy which will cover up to 1 million dollars for a loss, with a maximum of 2 million in one given year.  That may sound like a lot until you do some research.  Find out the types and amounts of damages awarded in your industry. Your state department of insurance can be a good starting point.  If the average is 1 million dollars, and there are awards of 3, 4, 5 or more million dollars, that 1 million per loss isn’t a big number anymore.

Work with your licensed insurance professional to determine if higher policy limits or a commercial umbrella policy may be needed.  It’s important to remember if you or an employee of your business is determined to be at fault for injuring a third party, the award can include all medical costs including rehabilitation, loss of income, and also pain and suffering.  Talk frankly and ask your insurance professional tough questions regarding your liability coverage and possible outcomes.

Business property coverage limits should also set as high as allowed if possible.  Work with your agent to determine a total loss and the cost of replacing the entire structure and all equipment and furnishings while looking at starting over.  Just because you may lease space doesn’t mean you reduce limits.

It’s important to run the same scenarios and potential risks as they pertain to your commercial vehicle insurance.

Determine the best coverage options for your business by working with a licensed insurance professional. It’s important to look at each component of your business insurance separately, and then put the entire package together to reduce the risk exposure your business will face now and in the future.

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Workers' Comp
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Workers' Comp
General Liability
Auto
More..