All Types of Business Insurance
Starting your own business can be scary, especially, if you go into it without protection. It’s like being in the front line of a battle with no armor; you will lose. This protection that I am speaking of is business insurance. It is very important to protect your company assets, for a minor incident can destroy everything that you have worked for in your business and, in some cases, in your “home”. Now, there are many different types of business insurance, for example: Auto insurance, key employee insurance, liability insurance, and asset protection insurance. It isn’t written in stone that you have to have all of these insurances when you first start your business, but, I would, definitely, look into all of them as your business starts to grow. Let me give you an idea of how each of the insurances, that I have named, can protect your business.
Commercial vehicle insurance or, commonly known as, business auto insurance is very important to have if you are using your own personal vehicle or a fleet of vehicles to do business. If you are a sole proprieter than you may be able to gamble with your own personal vehicle, but, if any of your employees drive their vehicle or your vehicle(s) for your companies use then it is best for you to have business auto insurance. You do not want to run the risk of profit and/or property loss due to an accident happening on your companies time without insurance coverage. To protect your companies assets; I would recommend that you have an insurance policy that is no less than 300,000/100,000 in coverage. This type of coverage pays no more than 300,000 total per accident and no more than 100,000 per person involved in the same accident. My husband has his own business where vehicle use by employees is part of his company. Well, on one particular dreadful day, five of his employees were traveling to a work site (in one of our company vehicles) and, unfortunately, was in an pretty serious accident. None of the employees hospital bills was over $50,000 but were close after surgeries and therapies. My point is they were all covered. Why? Because, when you multiply 50,000 x’s 5 employees the total comes out to be 250,000 which is not over the 300,000 limit within your policy and not over the 100,000 total for each employee. Do you get it? Imagine if you were being sued to pay that out of your companies profits or even had to dig into your personal assets.
Key employee insurance, better know as key man insurance, is important to have if you have one or two employees or managers that are literally assets to your companies’ growth. If there is someone in your company, that if they died it would hinder the growth, operation, and/or may even cause you to lose in profits then you should really take a look into getting key employee insurance. This is simply life insurance in which you pay the premium, and you are the beneficiary in case of an unexpected death of one of your key employees. Some businesses end up filing bankruptcy due to such a thing as an key employee’s death. But, with it you can keep the business afloat with paying out debts and payroll, promotions or replacements, paying off investors, or in worst cases to pay out severence pay for the closing of the business. The point is that you have the money to be able to do these things in the event that such a tragedy occurs.
Liability insurance protects your company from being sued by your clients. An example of this is if you have a cleaning service and one of your employees breaks a mirror in your clients home then this type of insurance will protect your business from either a suit being filed for damages and/or loss of profits. This is an example of property liability, but there is, also, personal liability within this coverage. An example would be that you have an ice cream shop and your customer tells you that they do not want any nuts due to allergic reactions and you put them on there anyways. The customer takes a bite of their sundae and has to be rushed to the hospital, at this point, you are facing a lawsuit. This policy doesn’t make you immune to the lawsuit but can protect your personal and business assets from the suit.
Asset protection insurance covers a wide-range of services. Some people call it inventory or equipment protection insurance because that is just what it will protect. This policy is designed to protect everything that is in your office or building. As homeowner’s insurance protects all items that are in your home; the same, asset protection insurance protects all items that are in your office building. Car dealerships, especially used car dealerships, benefit from hail storms due to broken windshields through this type of protection. Why? Loss of inventory.
So, I hope that you are understanding the importance of protecting your business assets. Every business is different, therefore, it is up to you as the business owner to figure out what would be considered a great loss or tragedy to your business and to get whatever type of insurance that you would need to prevent it. Remember, one of the worst things that you can do to your business is to be caught without insurance in the event of a lawsuit.
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