After years of recession, it appears that the economy is moving forward. Some would say that we are back in a prosperous position, some people have decided that starting up a business is a great way to make money doing what they love. Many folks have a dream of owning a restaurant, or perhaps opening a mechanics shop. They are learning the “ins and outs” of a business plan and laying the groundwork for their future as their own boss.
If you happen to be one of those people, you can’t leave insurance out of the mix. Many small businesses fail in the first year because they didn’t take insurance into account. They suffered a loss, and because they didn’t have insurance, they did not have the resources available to get back in business. Don’t let this be you! Following is a list of five types of insurance that you need to consider when opening a business. 1) Property and Casualty Insurance. Property and Casualty insurance is the cornerstone of any insurance program. When you become a business owner, the world looks at you differently. Instead of being “Dave the ‘Working Stiff,’” you are now “Dave the Business Owner.” Some people think that since you own a business, you must be “rolling in the dough!” Most business owners KNOW that this is not the case, but we’re talking about perception. You are now a bigger target for people who want to make a quick buck from insurance. Staged accidents, especially in retail establishments, are not as uncommon as you might think. The liability portion of your Property and Casualty policy covers you against these types of “accidents” as well as the true accidents that we all want to avoid. Also, if you are opening up a retail business, there is usually a tremendous amount of inventory and equipment involved. You need to protect your investment in case you are broken into and robbed, or in case the place of business burns down. Once again, it happens more often than we’d like to think. There are many other parts of a standard “business owner’s policy” or “BOP.” Check with a licensed agent experienced in business insurance to get more details. 2) Workers’ Compensation Insurance. Workers Compensation insurance covers your employees in the event that they are injured while working for you. This even includes people you pay on a 1099 basis if they work on an hourly basis using your equipment. A major injury by one of your employees, while devastating personally, will devastate TWO families if there is no Workers Compensation Insurance: your family, and your employee’s family. Don’t skip this vital coverage. 3) Professional Liability Insurance. Many businesses in which advice is given require professional liability. That includes real estate agents, financial advisors, as well as insurance agents. Counselors and tax preparers also often need professional liability to do business. This coverage is important in that it provides coverage to the professional in case they make a mistake in some way. Being human, we all make mistakes, even when we do our best to avoid them. This coverage can give you peace of mind as you work hard to grow your business. 4) Product Liability. Most liability policies cover this type of insurance loss. It is also sometimes “Products and Completed Operations” coverage, or PCO. This coverage is important in that it covers the business in the event that a product that they produce, or a service provided causes damage to someone with whom they do business. For example, an oil changing station changes the oil for a customer, but doesn’t put the oil plug back in properly. As a result, the oil drains out and causes the engine to burn up. PCO coverage would pay to replace the engine. 5) Business Interruption Insurance. This type of coverage can mean the difference in staying in business, or going out of business after a loss. Without this type of coverage, a business owner may be made whole in all of their inventory that is lost, but because it took a long time to rebuild, or to purchase new equipment or inventory, all revenue produced by the business comes to a halt. Many businesses could not afford to be on hold for two to three months. Business Interruption Insurance reimburses the business for income lost after a loss. Navigating through the complexities of business insurance can be a challenge. A small hole in coverage could leave a business in dire straits if left uncovered. For this reason, it is important to have an insurance professional to guide a new business owner in what type of insurance is necessary for them. Our office is experienced in helping new business owners get the coverage they need at a price that’s right. Feel free to call me or my experienced staff at (661) 946-4224, or email me at dave@thedaveowens.com.
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AuthorDave Owens, Owner/Agent. I have proudly served in the Insurance Industry for over 20 years. Archives
October 2019
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