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Business Insurance FAQ's

When do I need to get insurance for my business?

You need to get a commercial insurance policy for your business right away. Losses can happen at any time in your business's lifespan and it is best to be fully protected at all times. If a loss is suffered when you do not have the correct coverage or no coverage at all, there is nothing that your insurance agent can do to help you. You must prepare yourself for all types of risks before they happen. Many states and local authorities and even your landlord or mortgaging company also require your business to be insured before you begin any sort of operations.

Do I need insurance for my business even if my business has no assets?

While you may think that your business has no assets, you are probably wrong. Are you reading this information on a business computer? Did you renovate the property that your business is located on? Did you buy any supplies at your local office supply store? Is your business either a source of income or a potential source of income? If so you need protection against possible losses. There are two basic types of insurance - property and liability insurance. Property insurance covers damage to or loss of the policyholder's property. Liability insurance covers either you or somebody that is sued because of your doing- both in defense of this lawsuit and possibly settling it if at all possible. Both of these insurances may be imperative to the survival of your business.

What type of Insurance Coverage do I need for my business?

There is a wide array of coverages' available to fulfill your insurance needs. For example, a common type of insurance policy used by many small businesses is called the Business owners Policy also known as BOP. Package policies such as BOP typically provide the small business owner the most thorough coverage at low premiums. Of course the contents of a BOP policy could be purchased on an individual basis from different insurance companies, but usually it is easier to order a package policy from a singular company so that there will be less hassle in the claims process in the event of several losses over a short period of time.

Because of the multitude of businesses and the varying degree of insurance coverages that are available to these businesses, it pays to do research before purchasing a policy. It is always better to know what perils your business is covered for before an accident or mishap occurs. Consult with your broker to discuss these issues. Just remember that your broker works for you and no question is too small.

What types of property should I insure for my business?

The following types of properties should be considered when deciding on the amount and type of insurance to purchase (remember that this is only a partial list as businesses vary greatly throughout the United States):

  1. All buildings and structures (whether they are rented or owned)
  2. All furniture
  3. All supplies
  4. All equipment
  5. All inventory (both potential and current)
  6. Money and securities
  7. Renovations and improvements you have made to the structure or business
  8. Machinery
  9. Boilers
  10. Computers and other types of data processing equipment and media
  11. Records that your business may keep; especially those that record accounts receivable,
  12. Other valuables such as books, papers and documents
  13. Automobiles, trucks, construction equipment and other mobile vehicles.
  14. Signs and other outdoor equipment that is not attached to a building
  15. Trademarks, good will, etc.
  16. Leased and financed equipment
  17. Satellite dishes
Calculate the cost of replacement of each of the previous items and the current and future values of the equipment and buildings as well. While some of the items above are covered under the most basic policies, others may not be. Most others coverage can be added by amending your policy. Some items such as money and securities may need to be covered by a separate policy. Check with your broker or agent as to the specifics of your insurance needs.


How do I decide on the types of property insurance that I need to buy?

One of the most important things to do besides taking inventory of all your business property is to take into consideration whether or not your policy would cover your excess stock in the event that you have more on hand than usual during peak seasons of business. One example of this is a tire store which has a large stock of tires both before and during the winter season than they have during the spring and summer months. It is important to make sure that you have adequate coverage during all periods of time. Most business policies are designed in such a manner that it is easy to add or subtract items in order to meet your changing needs. Always make sure to discuss changes with your insurance agent. Better to ask questions now before its too late.


Some of the common additional coverage's for business property include the following:

  1. Boiler and Machinery Insurance- covers equipment break down, boiler breakdown, machinery breakdown or breakdown in computer systems and/or telephones. Coverage usually provides reimbursement for property damage, related expenses (such as transportation), and business interruption losses.
  2. Builders Risk Coverage- this covers your building during the course of construction. While policies can vary greatly, the better ones usually pay the buildings full value at the time of loss.
  3. Building Ordinance Coverage- This provides coverage in the event that your township or city mandates certain rebuilding restrictions when there is damage to your building or structures. An example of such an ordinance is a city requiring the demolition of a building if it is damaged more than 50% of its total value.
  4. Business Interruption Insurance- this insurance covers loss of wages and earnings plus net profits that the business normally would have been able to produce if there was no loss or damage to the property.
  5. Commercial Crime Coverage's- this covers fixtures, money, securities and stock against burglary, robbery and theft both on and off of the insured premises from both employees and non-employees.
  6. Debris Removal Coverage- this insurance covers the cost of removing debris after there is damage from a covered peril such as fire before reconstruction of the damaged building can commence. This coverage must be added to the standard fire coverage.
  7. Fidelity Bonds- Covers owners of businesses in the event of a loss due to dishonest employees.
  8. Glass Coverage- this insurance provides coverage for glass breakage in places such as storefront windows and/or plate glass.
  9. Inland Marine Insurance- this insurance covers property that is damaged in transit from places

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