I am just starting my business. Do I need insurance right away?
The chance that you could suffer a loss begins with the first day of business. You
can't get help after the fact. If you suffer a loss and have no insurance or have
improper or insufficient coverage, there is very little, if anything, your insurance
agent can do to help you. You must be prepared for the risks that are inherent in
any business and the losses, sometimes catastrophic, that they can cause. Also,
many states and local jurisdictions require that businesses be insured to begin
operating. And if you rent space for your business, your landlord probably requires
that you be adequately insured as well.
I don't have any major business assets. Why do I need insurance?
Every business has some property. And, when you think about it, your business is
your property. Just like your home and your car, your business needs to be protected
from loss, damage and liability. In addition, your business is your source of income,
so you need protection from the potential loss of that income. Generally, there
are two types of insurance - property and liability. Property insurance covers damage
to or loss of the policyholder's property. And if somebody sued for damages caused
by you or your possessions (other than a vehicle covered by your insurance policy),
the cost of the suit - both defending it and settling it if necessary - would be
covered by your liability insurance.
What types of property do I need to insure?
Your business may not possess all the following types of property, but you can use
this list to make sure that you have considered all the property categories and
any insurance coverage that may be warranted:
- Buildings and other structures (owned or leased)
- Furniture, equipment and supplies
- Inventory
- Money and securities
- Records of accounts receivable
- Improvements and betterments you made to the premises
- Machinery
- Boilers
- Data processing equipment and media (including computers)
- Valuable papers, books and documents
- Mobile property such as automobiles, trucks and construction equipment
- Satellite dishes
- Signs, fences, and other outdoor property not attached to a building
- Intangible property (good will, trademarks, etc.)
- Leased equipment
To establish the amount of insurance you need on each, your insurance agent can
help you review the types of property you own and their uses. Some of these items
are covered in the basic policies. For others, an endorsement, or rider can add
coverage. And some, like money and securities, may not be covered by a standard
commercial policy and may require a second, separate policy.
What types of property insurance should I consider buying?
The best thing to do is to take a complete inventory of all your business property,
determine their value and decide if each is worth insuring. Then check to see that
the items on the inventory list are included in the basic business property policy
and covered for the correct amount. If not, ask your agent about the cost of purchasing
additional coverage to meet your needs. You also need to consider your business
situation. Are you planning a major expansion?
|