Business Insurance Questions To Ask
For companies who are debating what amount of business insurance is best for them, be ready to ask and understand the following common questions with your insurance agent(s):
Do I Need Business Interruption Coverage?
While this insurance is often not required by lenders, it covers the ongoing bills and added costs you will face and assists to retain customers in the event of a catastrophe. It is included under a number of insurance programs and can be acquired as an endorsement with others.
To estimate what a catastrophe could mean to your business, consider:
- Would you rent another building if yours was deemed unusable?
- Would you keep employees on payroll or risk releasing them?
- How long would it take to replace or repair machinery and what would you do in the meantime?
- How would you keep your customers and what would that cost?
What are the main types of small business insurance to consider?
Property and Casualty Insurance
Property insurance covers damages to or loss of property, including offices, residences, autos or luxury items like computers. Casualty insurance is acquired to cover legal costs incurred from bodily injury or property damage to another individual. Property and casualty insurance is subdivided into a pair of major lines: personal and commercial.
Business owners acquire commercial insurance to protect them from liability claims due to faulty products or services. Errors and Omission insurance is another important coverage for businesses, protecting them from liability claims due to errors made that lead to damage to clients.
- Commercial Auto Insurance
Commercial auto insurance covers your business for loss or damage to vehicles used by your business and for damage to others caused by your business vehicles. Note that vehicles used for business are not covered under your personal auto insurance policy even if a vehicle is used for both business and personal purposes.
- Liability Insurance
Liability insurance protects your company in case it is sued or held legally liable for injury or loss due to a mistake made by your company. It will usually cover the damages from a lawsuit along with the legal costs.
- Product Liability Insurance
Product liability insurance covers your business for damages due to a product designed, supplied, or manufactured from your company.
- Business Interruption Insurance
Business interruption insurance can make up for lost cash flow and profits incurred because of an event that has interrupted your normal business operations.
- Health Insurance
Health insurance provides health coverage for you and your employees.
- Life and Disability Insurance
Life and disability insurance covers your business in the event of the death or disability of key owners, partners, or employees.
- Workers' Compensation Insurance
If you have employees, you must, by law, participate in workers' compensation programs; workers' compensation insurance covers employees if they are injured on the job.
Can I Get a Policy that Combines Different Types of Insurance?
Yes. A business owner's policy (BOP), often appropriate for small to medium-sized businesses, usually includes property, casualty, liability, and business interruption coverage; you're likely to pay less expensive premiums with a package deal instead of buying the policies separately.
Other choices are the home office policy, which combines homeowner's and business insurance, and a "business pursuits" endorsement to your homeowner's policy, which provides the least protection.