Few things in life are riskier than launching and running a business. Neglecting business insurance needs can compound those risks. Protecting a business from financial disaster will not only preserve all the hard work and long hours that was put into it, but will also give the business owner some peace of mind.
A business owner has three types of small business insurance to consider, including one that is mandatory. Business owners who have employees must provide state-mandated coverage for injuries and illnesses that are job related through workers compensation insurance. While it is not mandated by law, business owners should also purchase business property insurance and liability insurance. Business property insurance will cover property, equipment and inventory while liability insurance will protect the business against potential liabilities in this litigious society.
Cleveland attorney Oleh Mahlay warns, “In this day and age of liability and lawsuits, a business owner can ill-afford to ignore insurance relative to their business.”
Small business property insurance
Property insurance can be purchased on the basis of the property’s actual value (the replacement cost minus depreciation), its replacement value (the cost of replacing an item without deducting for depreciation), or on an agreed-upon amount (commonly used for art objects and other unique items).
Basic property insurance will generally cover a business owners’ losses in the event of a fire or a lightning strike, and will pay the cost of removing property to protect it from further loss. Additionally, a standard small business policy will usually cover losses from windstorm, hail, explosion, riot and civil commotion, and damage caused by aircraft, automobiles, or vandalism.
Optional coverage can insure against earthquakes, floods, building collapse, and glass breakage. Property insurance can be categorized by what is insured and by the events leading to a loss.
The Independent Insurance Agents of America offers a checklist:
• Buildings and other structures, leased or owned
• Furniture, equipment, and supplies
• Leased equipment
• 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 (goodwill, trademarks, etc.)