Broker Check

Insuring Your Business: Are You Prepared for the Unexpected?

| September 12, 2018
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There are two risk exposures that no business owner can afford to overlook: property loss and liability loss. Property insurance generally covers your building, contents, and equipment in the event that physical property needs to be repaired or replaced due to perils such as fire, theft, wind, or certain types of water damage. Liability insurance helps protect you and your company from liability associated with normal business operations. Consider your coverage needs for product liability and premises liability, as applicable, to help protect your business in the event someone is injured while using your products or visiting your facility. For business owners seeking comprehensive protection, the possibilities of business interruption, disability, and the loss of key employees may also need to be addressed. 

In assessing the risk exposures specific to your business, think about what can go wrong and how such events might affect the operations of your business. Once you have established your potential vulnerabilities, one of our qualified insurance professionals can help you decide which forms of insurance coverage will best meet your needs. 

Business Owners Policy: While property insurance and liability insurance can be purchased separately, a business owner’s policy bundles property and liability coverage into one package. This combined policy typically covers business property that is exposed to risks such as fire, smoke, hail, wind, theft, vandalism, and some forms of water damage (for instance, leaking roofs or broken pipes). Insurable property includes, but is not limited to, buildings, office furniture and equipment, machinery, inventory, and signs. Coverage may also include protection against business interruption. 

Business Interruption Insurance: While few business owners would think of leaving their buildings and contents uninsured or their business unprotected from liability, many neglect to insure the primary purpose of their business—the earnings. Business interruption insurance can help provide a steady income stream if your business has been interrupted or stopped due to a covered disaster. In the event of an interruption to business, policy proceeds can be used to cover lost net profits and any continuing expenses. 

Business Overhead Expense Insurance: While preparing for business interruption is important, so is preparing for the possibility that an accident or illness could hinder you from conducting business. Could your firm survive if you had to stop working? Business overhead expense insurance can help sustain your business during your disability by paying expenses such as salaries and benefits; rent, lease, or mortgage payments; property taxes; equipment costs; insurance premiums; maintenance costs; and utility bills. In general, benefits are paid monthly after a predetermined waiting period, limited to a maximum amount, and restricted to a specified length of time (often from one to two years). Business overhead expense insurance does not, however, replace the need for personal disability income insurance, which replaces a portion of your income in the event of a disability that prevents you from working. 

Key Employee Insurance: Besides preparing for your temporary absence due to disability, have you thought about the consequences of the disability or death of a key employee? Along with losing a valued member of your team, you would also be losing skill, experience, and the important business relationships cultivated over the years. Key person insurance covers a company against the loss of a valued employee. The proceeds can provide funds to recruit, hire, and train a replacement; replace lost profits; and reassure lenders that funds will be available to repay business loans. 

Because every business is different, there is no standard insurance policy available to cover all business needs. Be sure to assess your coverage requirements regularly so your business is protected. Contact your qualified insurance professional for more information.

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