When starting your small business, be sure to purchase adequate insurance. For many small businesses, a good option for property, casualty and liability insurance coverage is business owner’s insurance.
There are several advantage to a business owner’s insurance policy.
Comprehensive. A business owner’s insurance policy includes most of the basic property, casualty and liability coverage that your small business needs.
Cost Savings. By combining coverage in one package, a business owner’s policy may cost less than if you purchase individual policies for each business risk.
Flexibility. A business owner’s policy can be tailored to suit your business and its needs. The insurance company will take into account the type of business, its total assets, its location and other factors in writing the policy. Also, additional coverage can be included to meet your business’s special needs.
One of the biggest advantages of a business owner’s policy is that it usually is relatively comprehensive, including coverage for:
Property . Property coverage includes the building or office space occupied by your business as well as its equipment, furniture, computers and inventory. It also should cover other peoples’ (employees, customers, suppliers, etc.) property when it is on your business’s premises.
Standard Perils. Standard perils include fire and theft, both by employees and nonemployees. Business owner’s insurance generally does not cover damage arising from flood or earthquake, so it you want that coverage, you will have to purchase it separately.
Business Interruption. A business owner’s policy will reimburse you if your business operations are interrupted by a fire or other covered loss. You may be reimbursed for lost profits, expenses related to the disruption itself, and ongoing expenses of the business until it is able to resume operations.
Personal and Product Liability. Business owner’s insurance covers you if another individual is hurt on business property (for example, as a result of a slip and fall) or if your product or service harms another individual or his property.
Professional Liability. Your business could face professional liability if it or an employee is accused of copyright infringement, theft of intellectual property, slander and so on. If so, your business owner’s insurance policy should cover you.
Borrowed or Rented Vehicles. Business owner’s insurance provides coverage when you rent or borrow a vehicle for business use. It also may apply if an employee uses his personal vehicle on company business. Vehicle coverage under a business owner’s policy may be limited to liability claims, so be sure that it is adequate for your needs. Also, it does not apply to vehicles owned by the business, which must be covered by a separate policy.
Whiles business owner’s insurance is relatively comprehensive, it does not cover all risks faced by a small business. Depending on your situation, your small business may need additional property, casualty and liability coverage such as:
- Vehicle insurance for an owned fleet or individual vehicles
- Additional liability insurance, such as a business umbrella policy
- Flood and earthquake insurance
- Specialty insurance, such as incremental coverage for high-value inventory or expensive, specialized equipment
When purchasing business owner’s insurance, shop around to find the best deal. One place to start is your local Chamber of Commerce or small business association, since you may be able to obtain discounts on insurance through them.
