Protect Yourself! Know the Basics of Insurance

A would be thief, according to police, tried to rob the SoHo branch of Bloomingdale’s of over $4,000.00 worth of merchandise. The woman, 32, was confronted by store security and promptly tried to make a run for it. Her 2-year old child stood guard outside the changing room while her mother looted clothing. The stroller, with child inside, was then used as a battering ram against security in her desperate bid to escape. Insurance can help protect you against instances such as this and much more.

There are a lot of things that can happen and you don’t want to be held responsible. The following article will provide you with some basic information about insurance you should have.

Property Insurance

Basic property insurance covers damage or loss due to fire, vandals and other means. Flood damage is often not included but is something you should consider as an add-on. You’ll see property insurance in one of two ways: “named-peril” and “all-risk.” It’s very important you know the difference.

Named-peril covers certain losses from certain causes. An all-risk policy will cover anything damaged unless specifically listed as not covered. When you have settled on what policy you want you need to think about what to cover. Each company will have a standard list of what is covered. Here is a short checklist:

  • Building
  • Supplies
  • Inventory
  • Machinery
  • Office Equipment
  • Furniture
  • Paper Records
  • Automotive (cars, trucks, construction equipment etc.)
  • Intangibles like a trademark

You normally purchase insurance based on replacement value. List everything you have along with how much it would cost to replace it. This means everything from your laptop to the sign hanging on your bathroom door. Look over the list and check off the items you definitely want to be covered. You may adjust this before you finalize the policy as the more stuff you have add value which means your policy will cost more.

Liability Insurance

This type insurance provides you with legal protection in case you or your business is sued for whatever reason, which happens more often than you think. If someone walks on your property and falls down or falls in a fountain then you may expect a lawsuit. Liability insurance covers injury and the costs of legal services. There are several ways to determine how much liability insurance you need. Some businesses base it on their total assets while others use an average of recent settlements. Always talk to an insurance agent before making a final decision.

If you rent a space then the landlord may have a set amount he requires you to have. Keep in mind that this insurance does not cover a “failure to provide service” lawsuit. You will need a personal liability policy or an “errors and omissions” policy. There is also another type of liability insurance known as “employment practices” insurance. This covers against sexual harassment, wrongful termination, and racial or gender-based lawsuits.

Health and Workman’s Compensation Insurance

This is generally called “insurance for the people” as it covers the people that work for you as well as you yourself. Health and dental plans are optional. Many employers offer it at the cost of the employee. Workman’s Compensation insurance is mandatory. It covers job-related injuries and illnesses. It can cover the costs of disability, rehab, and medical bills and even cover burial and other costs associated with the death of an employee. The term “employee” differs in literal meaning so check with your labor board on their definition.

Having the right insurance is paramount to a long and profitable business. This can be an easy process or a difficult one. Choosing the right coverage can hang on the shoulders of you choosing the right agent. Never solely use the Internet or phone book but always ask for referrals from other businesses. The sooner you get insurance the sooner you can be protected from life’s little mishaps.