You have a business all going now and there’s one more important step that you need to take and that is buying insurance for your business. This is one of the requirements if you don’t want to pay millions out of your own pocket. You will most likely encounter legal claims if you have a high profile business that deals with consumers. If you have a business where you don’t have consumers then you don’t have to worry about it. Most of the times businesses are made for consumers and therefore you will need to protect yourself and your business. Insurance is the best way. It’s also required for certain types of businesses. Even home-based business should buy insurance just in case they have lost their office equipment or some other natural disasters.

What are the different types of insurance? There is the business owner’s policy which has liability and property damage coverage. The coverage will be with loss of data, software or income, theft, and general business liability. The building is also covered. It also covers off premises coverage which could be products you sell or parts you install. You can also have optional coverage of flood protection or outdoor signs.

Another type of insurance is home office policy. This is for home based business. The coverage will be for general liability, loss of income and ongoing expenses like payroll for up to one year if the business can’t operate because of damage to your home. This type would combine homeowners and business insurance together so that there won’t be duplicate coverage or gaps. It also covered loss of records, accounts receivable, some off-site business property, fire, theft, and personal liability. Some policy doesn’t cover floods or earthquakes. This type of coverage is good if you have only a few customers that go to your business.

Insurance is just a requirement, why would you go without it. You wouldn’t drive without insurance and so is the same with your business. What if a customer falls on your business floor and injured and broke their leg? Are you ready to deal with their $100,000 lawsuit? If you have insurance then you wouldn’t care because the policy would cover the victim. If you don’t have insurance then you’ll be putting money out from your own pocket. No one really have that much money to pay upfront. You might even risk the closure of your business because you’ve lost your savings to the lawsuit. Lawsuit is very damaging to a business and you have to protect yourself.

There are some business that are more prone to lawsuit then others. The following are risky business: auto shops, doctor’s office, restaurants, childcare, home health, fitness center, and many other. If your business involves customers then you’ll be sure that there will be lawsuits. If you fix someone’s car and it just fall apart on the freeway and they got into a bad accident, they will sue you and you have to be able to cover that lawsuit. Therefore, having insurance will saves you tons of headache and money.

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This entry was posted on Sunday, October 12th, 2008 at 6:19 am.