Now you’re ready to start looking into business insurance, also known as commercial insurance. You can probably safely say that your business is your largest investment. It’s a great thing that you did your research. This article is meant to help you understand what your broker/insurer is trying to tell you. While they may explain the details to you, you will already have some knowledge. You will learn more about business insurance below.
You will first want to ask about your general liability. While I won’t spend much time on this, it’s important. However, it can vary from one business to the next. It is important to ensure that your general liability covers your “Products/Completed Operations”. If it states “EXCLUDED”, and the agent or broker doesn’t explain why, that’s a sign to seek out a proposal from a different agent. Although the proposal from the other agent may be slightly higher, it will likely provide the coverage that you are looking for. You want your “Products/Completed Operations” included. The “Hired and Nonowned Autos” item is another I would add. You don’t want to be without this coverage if your employee(s), for example, uses their personal car to run errands such as to the post office and the store. You might pay an extra $150 per year, but it is well worth it if and when you really need it.
Now onto property insurance. You may be thinking, “I rent/lease, so I don’t have to insure anything.” What about your desks, inventory and decorative art? This is “Business Personal Property”. Also known as BPP. Why is it called business “personal”? They do. Your BPP should be covered at Replacement Cost. It is possible to insure the BPP at Actual Cash Value. However, it will likely cost less to insure at RC. Make sure that the deductible you choose is reasonable. I’d choose $500 or $1,000. You should make sure that your agent uses a replacement price estimator if you own the building. (Search Marshall Swift Beck for more information. Ask your agent to provide a copy to verify that he/she has all specifications. Debris removal can be very costly so make sure you include it in your estimate. Property also includes “Business Income”. It’s a good idea to request a quote. Business Income helps you to rebuild or relocate your business in the event of an emergency, such as a fire. Certain policies even provide salary coverage for key employees. It is not a good idea to lose your top sales manager to someone else while you rebuild.
Workers Compensation, certain states require it while others do not. WC is a highly recommended product. These “accident policies” are often sold by agents. They’ll probably tell you about the coverage for employees. That’s nice. It’s nice. You, the employer, need to ensure that your policy covers you against a lawsuit by an injured employee.
There is more to business insurance than I have already mentioned, but this should get you started. Ask your agent many questions. Ask your agent many questions and make him work for the policy. Your agent will respect you if you are loyal!
