The 7 Top Types of Insurance Needed for a Small Business
1/21/2016 8:45 AM
This is a common question from people just starting a new business. With all the things that are required to start a new business just thinking about the insurance needed can make your head spin. It's really not to difficult when you have an insurance agent/broker at Triest Agency in Charleston that will walk you through all of the basic coverages needed. Here are a few of the insurance coverages for your new business that you cannot operate without.....
- Property Insurance covers your real property (building) and business personal property. Even if you don't own a building you'll need coverage for your business personal property which includes furniture, fixtures and equipment. Many times when renting, you'll spend substantial sums of money improving the space. These are leasehold improvements and they can be covered. Property insurance can provide for coverage against fire, windstorms, theft and other perils. These vary but company and policy purchased. Ask your agent to explain the perils covered but more importantly, the ones that aren't covered. Most property policies exclude earthquake and flood damage.
- Commercial General Liability covers your business for negligent agents committed. These can be direct claims and costs, a judgement or settlement in a lawsuit and legal defense costs. These can be claims from a customer falling in your business because there is water on the floor or for a restaurant it could be a patron being injured by hot coffee poured in their lap. You should ask if the policy covers products liability claims.
- Inland Marine coverage will provide protection for property that could be in transit or away from your actual premise. Most property insurance policies cover the property while at the business location and may provide some coverage for the property if it is off location. If your business has property that is frequently off premise then ask about an inland marine policy.
- Professional liability insurance is not just for doctors and lawyers. Yes. You'll need a medical malpractice policy or a lawyers professional liability policy if you're a doctor or lawyer. But other professional like landscape architects, engineers, management consultants, financial planners and such need professional liability protection. This generally provides protection for the professional and the business for error & omissions in your delivery of professional services.
- Commercial auto insurance is similar to a personal auto policy but structured to protect your business. Even if your business doesn't own vehicles, you still need "non-owned/hired auto liability insurance". If you rent a car in the name of your business then the commercial general liability policy will not respond unless you have "non-owned/hired auto liability". Even sending an employee on an errand using their own car can put your business in jeopardy. Don't forget to ask about this.
- Umbrella liability insurance provides an extra layer of protection above and beyond your underlying liability insurance policies. Your business could be wiped out by a large liability claim so adding this coverage is important.
- Workers compensation is necessary even if you have one employee. The law may require that you have workers compensation for your employees if there are 4 or more employees but you still have tremendous exposure regardless of the number of employees. If your employee is injured working for you then without workers compensation insurance you could be sued and paying out of pocket.
This list is by far not exhaustive of all of the coverages you may need for your business. Insurance is complicated and having an experience agent and insurance broker like Larry Freudenberg at Triest Agency is an advisor you need. Larry Freudenberg has owned Triest Agency since 1987 and has the experience necessary to help you navigate these waters. Before joining the family's insurance agency, Larry was a commercial banker at a large bank in Atlanta. He also holds a certificate in financial planning from NYU. Larry works by appointment only and is available even for second opinions.