I’m just getting my business started. Do I need insurance right away?
Yes, because the chance that you could suffer a loss begins with the first day of business. You can’t buy Business Insurance to help after the fact. If you suffer a loss and have no business insurance or have improper or insufficient business insurance 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 being operating. And if you rent space for your business, your landlord will require that you be adequately insured as well.
I don’t have any major business assets. Why do I need business insurance?
Every business has some business property. And, in essence, 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. Business Property Insurance covers damages to your business property. Business Liability Insurance covers 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 business liability insurance.
What types of business property do I need to insure?
Your business may not process 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
- Improvements and betterments you made to the premises
- Data processing equipment and media (including computers)
- Valuable papers, books and documents
- Mobile property such as automobiles, trucks and construction equipment
- Signs, fences and other outdoor property not attached to a building
- Intangible property (goodwill, trademarks, etc.)
- Leased equipment (Copiers, Postage Meters, etc)
To establish the amount of property insurance you need for each one, your Trusted Choice® Insurance agent can help you review the types of property your own and their uses. Some of these items care covered in the basic business insurance policies. For others, coverage can be added by an endorsement. And some, like money and securities, may not be covered by a standard commercial policy and may require a second, separate policy.
Who decides how much my business property is worth?
Property insurance can be purchased on the basis of the property’s actual cash value, on its replacement cost or on an agreed amount. The differences between the three are:
Actual Cash Value
The replacement cost of the item minus depreciation. For example, a new desk may cost $500. If your seven – year – old desk gets damaged in a fire, it might have depreciated 50 percent. Therefore, you would be paid $250 for it.
The cost of replacing an item without deducting for depreciation. Today’s cost for a desk of a size and construction similar to the seven – year – old one damaged by fire would determine the amount of compensation. If it costs $500 today, that would be the replacement coverage.
Art objects, antiques and other unique items are usually insured at an amount agreed upon when the policy is being written. An appraiser values the goods to be insured and the business owner and the insurer agreed upon an amount that the insurer will pay if the goods are destroyed due to a covered peril.
Check your policy. If you prefer replacement coverage and do not already have it, this coverage can be added to your policy. Inflation – guarded coverage. Which automatically increases your insurance amount a certain percentage, protects against rising construction costs. Your Trusted Choice® insurance professional can advise you of the costs involved.
Everybody seems to be suing everybody else these days. What if someone sues my business?
No business can afford to be unprepared for a lawsuit. Liability insurance protects your business assets when the business is sued for something the business did (or failed to do) that contributed to injury or property damage to someone else. Liability Insurance coverage extends not only to paying damages but also to the attorneys’ fees and other costs involved defending against the lawsuit – whether valid or not.
The standard business owners insurance policy provides liability insurance coverage as does a separate policy known as a commercial general liability insurance. Whether purchased in a separate policy or as part of a standard business owners policy, it will cover bodily injury, property damage, personal injury or advertising injury. The medical expenses of a person or persons (other than employees) injured at the business or as a direct result of the operations of the business are also typically covered.
Usually excluded from both types of liability insurance policies are suits by customers against a business for nonperformance of a contract and by employees charging wrongful termination or racial or gender discrimination or harassment. Many other exclusions, from use of autos to pollution liability, are included, so it is important to carefully review the policy.
Check with your Trusted Choice® insurance professional about the best liability protection covering all types of situations that may arise your business.
Huff Insurance is a full service Trusted Choice® Insurance Agency. We have been dedicated to Protecting Lifestyles™ since 1960. We offer a full array of Personal Insurance, Commercial Insurance and Life Insurance & Health Insurance products. Call us at 410-647-1111