Business Insurance

Protecting your livelihood

If you own a home-based business, it's critical that you obtain insurance for all aspects of your operation that are vulnerable to financial loss. If you are providing a product or service and something goes terribly wrong, you might find yourself on the receiving end of a lawsuit. If you don't have liability coverage, you'll compromise your personal assets, including the family home. It's possible you could lose everything.

A common insurance package available for small businesses is the business owners policy (BOP for short). It provides coverage for three common elements: property insurance for any assets owned by the business including office equipment, etc.; business interruption insurance for any income lost because of a long-term shutdown of operations; and liability insurance to protect against any damage your products or services may have caused customers.

While an endorsement to your house's property coverage will cover your home office equipment, it won't cover business interruptions or injuries sustained by clients due to your products or services.

A separate form of protection required for many businesses is professional liability insurance, sometimes referred to as errors and omissions. This is insurance for people operating in specialized careers like law, real estate, etc. If someone sues you because of incompetence, liability insurance will protect your assets. Further, it will pay for any legal fees required to defend the lawsuit. In some professions, you can't even maintain a license to practice without it.

Running a business is difficult enough without having to worry about your financial assets - and insuring your business as necessary will help your bottom line in the long run. If you belong to an industry association, check out whether it offers group insurance, which may leverage a more favorable premium than you could receive on your own. As always, when comparing premiums make sure you are looking at similar products with similar benefits. You want an apples-to-apples comparison. If using an insurance broker, find one that specializes in your particular industry. Lastly, talk to associates already operating in your field. Find out what sort of coverage they have.

When it comes to securing business insurance, there's no need to reinvent the wheel. Go with what already has proven successful.

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