What if Wednesday: Why it Helps to Plan Ahead with Business Insurance Part 2

business insurance What if you’ve decided to start your own business but you don’t know exactly where to begin when it comes to insurance? Kemner-Iott Agency is here to put you on the path to finding the right coverage for your new business venture.

Types of Business Insurance

The U.S. Small Business Administration has compiled a list of different types of insurance policies that are available to you as a small business owner. Although insurance may not be required by law where you are starting your business, it would be wise to purchase coverage to protect your assets from financial loss in the event of a natural disaster or lawsuit. Here is a summary of the kinds of business insurance policies to consider for your small business:

  • General Liability Insurance – This insurance broadly covers and provides protection against the legal hassles associated with accidents, injuries and claims of negligence.
  • Product Liability Insurance – If you manufacture, wholesale, distribute and retail a product, this insurance protects against financial loss as a result of a product that can cause injury.
  • Professional Liability Insurance – If you provide a service to a customer, this insurance can protect against malpractice, errors, and negligence in the provision of those services to your customers. Some state governments require certain professions (e.g. physicians) to carry such a policy.
  • Commercial Property Insurance – This covers everything related to the loss and damage of company property due to a wide variety of events such as fire, smoke, severe weather, vandalism, etc. The definition of ‘property’ is broad, and includes lost income, business interruption, buildings, computers, company papers and money. This is definitely one you should talk to an insurance expert about to understand your specific needs.
  • Home-Based Business Insurance – Homeowners’ insurance policies do not generally cover home-based business losses. While you may be able to add on certain property damage riders to your policy, you may need to purchase additional policies to cover other risks, such as general and professional liability.

Since there are such wide variety of insurance policies available, always discuss your individual business insurance needs with your local insurance agent.

Other Types of Business Insurance

Some other types of insurance you may be required by law to purchase if you grow to large enough to hire employees include:

  • Workers’ Compensation Insurance – Businesses with employees are required to carry Workers’ Compensation Insurance coverage through a commercial carrier, on a self-insured basis, or through the state Workers’ Compensation Insurance program. Visit your state’s Workers’ Compensation Office for more information on your state’s program.
  • Unemployment Insurance Tax – If you have employees you are required to pay unemployment insurance taxes as determined by your state. First you’ll need to register your business with your state’s workforce agency. The State Taxes page on IRS.gov includes links to connect you with your state’s agency.
  • Disability Insurance – In the U.S., it is only mandatory to purchase disability insurance for your employees in six states – California, Hawaii, New Jersey, New York, Puerto Rico, and Rhode Island.  If your business is not located in one of these states, you can still offer disability insurance to your employees as part of your benefit package, but it is not required by law.

Information for this article was provided by www.sba.gov.

Contact Us

Before you open your own business, contact us to discuss your business insurance needs.  Kemner-Iott Agency is here to help you with all of your questions and we will assist you through each step of putting protection for you and your company in place. Call or Contact Us today to schedule an appointment or receive a free quote!

Our toll free phone numbers are: Adrian, MI (800) 642-5875(800) 642-5875Ann Arbor, MI (800) 228-7855(800) 228-7855, and Cassopolis, MI (800) 228-7855(800) 228-7855.  We look forward to serving you!

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