I had a college professor who always said; explain it so a fifth grader can understand. In the world of insurance, everything sounds really complicated. Then, along came Jeff Foxworthy’s game show, “So you think you’re smarter than a 5th grader” as icing on the cake. So, instead of being really complicated and covering every nuance, let’s break down business insurance in its simplest forms so a fifth grader (and the rest of us) can understand.
How does my business insure:
Buildings and Property
Property and Casualty insurance covers building and property. As simple as that seems, there are a number of losses that aren’t covered, such as flooding as one example. Just because your business is in leased space and not owned also does not mean you can go without property and casualty insurance.
Vehicles
A commercial auto insurance policy will cover your business vehicles and their drivers. Again, while seeming quite simple, many business owners assume a variety of risks by using their cars and assuming a personal auto policy will cover any risk. Sometimes, the auto coverage can be combined with Property and Casualty in a Business Owner’s Policy.
Employees
Every business must have workers compensation in place to protect them if an employee is injured on the job. Some states also require additional coverage be provided. Meet with your licensed insurance professional to determine what coverage is mandatory.
There are a number of additional insurances available to business. Ask your insurance agent/broker about options available for your business. Have a frank discussion about what risks your company faces while conducting your day to day business.
Liability
Small business liability insurance will protect against lawsuits, property damage or personal injury to a third party. It will pay for legal fees, settlements and judgments subject to the deductible.