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Today’s business world is more complex than ever before and with more specialized business models comes more areas where an entrepreneur can be exposed to liabilities. Now more than ever, it is important for business owners to assess the risks they incur during the course of daily operation, so they can come up with the correct amount (and types) of insurance coverage to fit their needs. To help determine what insurance coverage you need, here are some questions to answer before you sit down with your insurance agent:
- What is the value of your business property? You will need to assess the combined value of your office furnishings, equipment and other property belonging to the business so you can insure for theft, fire, flood and other such calamities. You may also want to think about special riders for particularly valuable items.
- Does your business have any employees? If you have employees, you will be required at the very minimum to have workman’s compensation insurance. Workman’s comp insurance covers employees’ medical expenses if they are injured on the job.
- Do your employees do a lot of work outside the office? If your employees do a lot of outside work and/or travel to other cities frequently, you will need to look at liability coverage for issues that may arise while they are on other people’s premises.
- Does your business use a vehicle in the regular course of operation? There are times when you may send an employee to Office Max to pick up supplies, but such trips would probably not require a special auto insurance policy. However, if your business makes deliveries on a daily basis, then each vehicle used should be covered by commercial insurance.
- Does your business manufacture and/or sell a product to the public? If you are a product maker/manufacturer, you will need to be insured for damage your product may cause to its consumers. This is called product liability insurance.
- Does your business regularly store customers’ credit card information or other personal data? Identity theft is a growing problem these days, and poses a huge risk for any business that is entrusted with their customers’ personal data during transactions. If this describes you, then identity theft insurance should be strongly considered.
- Does your business have 50 or more employees? Under the Affordable Care Act of 2010, businesses with 50 or more employees are required to offer health insurance to their employees (as of 2015) or be subject to a fine. But regardless of whether or not you are required, when you are competing for talent within the workforce, it always helps to offer an attractive health insurance plan.
- Does your business have key officers whose injury or death would be detrimental to its operation? Many businesses have owners, partners or key employees that are essential to maintaining its operations. When this is the case, disability and/or life insurance for these officers should be strongly considered.
This list is by no means exhaustive. When you speak with your insurance agent, he/she will certainly have several other areas to cover. However, having answers to these questions beforehand will go a long way toward crafting an insurance plan that will provide the right amount of coverage in all areas of your business.
About The Author
Todd Balderson has been protecting families and businesses through insurance coverage since 1996. He is the founder of Balderson Insurance Agency and serves clients in Maryland, DC, and Virginia. Todd is known for reminding people about how “insurance is more crucial to building your wealth than investments because without insurance, it’s easy to lose your assets.” Learn more about Todd and the insurance protection he offers at https://www.BaldersonInsurance.com
These are great questions to think through. Its important to consider carefully if your business needs this or not. You don’t want to find yourself in a position where you really needed it and never got around to figuring that our yourself.