Since you never know when a disaster may strike causing severe damage and disruption to your business operations, it is important to expect the unexpected and manage your risks accordingly. For that reason, business insurance should be factored into your regular cost of doing business. Generally, one way to prepare yourself and your business for the unforeseen is to have a plan before an incident occurs by taking steps to mitigate risks and by purchasing the appropriate insurance.
Types of Coverage
Here are some basic descriptions of the different forms of coverage that help to preserve a business:
Property insurance typically covers your building, contents, and equipment in the event physical property needs to be repaired or replaced.
Business interruption insurance usually provides you with coverage for loss of revenue and continuing expenses after a business has been wholly or partially disabled by a natural or man-made disaster.
Liability insurance helps protect you and your company from liability arising from day-to-day business operations. You should consider obtaining coverage for product/completed operations liability and premises liability to protect your business in the event someone is injured while using your products or services, or when visiting your facility.
Employment practices liability insurance is designed to protect you and your company from the types of liability that may arise from employment-related lawsuits, such as wrongful termination, discrimination, and harassment.
Automobile insurance generally covers both liability and physical damage in the case of an auto accident involving one of your vehicles. You may want to also consider adding coverage for “non-owned and hired” automobiles if you or your employees use personal vehicles on company business.
Life insurance provides coverage to a designated beneficiary upon your death or the death of an insured key employee.
Disability income insurance may protect your income or that of your employees in the event of a serious illness or injury that leaves you or your employees unable to work for a period of time.
Getting Started
Everything and everyone in your place of business is subject to risk, so look around and take stock of potential liabilities. In addition to your own detective work, enlist the help of your employees. Consider asking your staff members what they believe could result in damage, injury, or loss, while performing their work.
Once you have assessed your business risks, ask yourself the following questions:
1) What is and is not covered under my current insurance policies?
2) Could my business survive if it is shut down? For how long?
3) Does my insurance policy provide coverage to get my company back up and running? Does it cover the cost to replace my assets?
4) Could I pay my creditors, vendors, and general business and administration expenses during a prolonged shutdown?
5) Could the business survive in the event of my death or disability or that of another key employee?
Many resources are available to help you determine what insurance coverage you need for your business. Your local police and fire marshal, as well as government agencies, such as the Occupational Safety and Health Administration (OSHA) and the Small Business Administration (SBA), may provide assistance.
We will also be happy to assist you with evaluating your business risks. Remember, a little effort spent today could help prevent or mitigate your financial loss for events that may happen tomorrow.
Important Disclosures
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any insurance product. To determine which product(s) may be appropriate for you, consult your financial professional prior to purchasing.
This article was prepared by Liberty Publishing, Inc.
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