When you wrote the business plan for your company, you probably didn’t get too excited at the thought of figuring out which insurance policies you’d need. Or even think about it much at all! Maybe you even thought about skipping the insurance totally. But any seasoned business owner will tell you, it’s better to have insurance and never need it, than not to have it at all.
Can you imagine the financial and legal burdens your business could face without protection? You could even go bankrupt and lose your business entirely.
But, if you take the proper steps to make sure you’re covered, you won’t have to worry.
You need to protect the space you operate out of along with the fixtures and furnishings that are inside. Did you know that property insurance will cover fires, but may not necessarily protect you against natural disasters like floods or earthquakes? This insurance covers items like your ovens, refrigerators, culinary supplies, cash registers, inventory and even outside circumstances like vandalism. Depending on your coverage, it can also cover damages to your outside signs, fences, landscaping and even satellite dishes.
This is where natural disasters can be covered. And you actually specify in the policy what is covered — wind, hail or even a riot. But if something else occurs that isn’t in the policy, you’re out of luck. So this type of insurance is for owners who know what their risks are, like someone operating in a flood zone. To be covered for ALL risks, see the next section.
This covers everything from storm damage to smoke damage to theft and beyond. But certain perils may be excluded from such a policy. So be sure to ask your agent if you need this along with the insurance listed above. This is more expensive than specific peril, but offers a more comprehensive coverage.
This is a big one for retail businesses. If a disaster or catastrophic event does occur, your business will no doubt suffer from lost income due to your staff’s inability to work in the store. Business interruption insurance compensates a business for its lost income after these types of incidents or even if you were to be sued and unable to remain open for business.
If your company uses its own vehicles, insure those, too. Just like your personal vehicle coverage, this protects you in the event of an accident and will provide a replacement or rental for a loss.
General liability is one of the most important parts of a business owner’s insurance coverage. It offers protection for everything from someone slipping and falling in your store to a patron in your restaurant getting sick and pointing the blame at you. It’s a catch-all for a range of issues you may be confronted with. Remember, this isn’t just for covering medical bills. This insurance can help pay for legal fees if you get taken to court and for any other damages for which your business is found liable.
If your restaurant serves alcohol, you’ll want to get a policy so you’re covered if someone is served too much to drink at your establishment and harms another person while driving intoxicated. In most states, this type of policy is mandatory.
Your business needs to protect itself against something happening to one of your own employees while on the job by having workers’ compensation. This is much more prevalent in a restaurant where someone can easily fall on a wet kitchen floor, but check your state’s requirements for operating a retail store, too, for specific mandates for coverage.
“Once the first employee has been hired, workers’ compensation insurance should be added to a business’s insurance policy,” says entrepreneur.com. “This will cover medical treatment, disability and death benefits in the event an employee is injured or dies as a result of his work with that business.”
Believe it or not, theft is its own category of insurance. Even though a boutique selling designer clothing or a jewelry shop may seem more prone to theft with its high-ticket items, it can happen at all stores, restaurants, and agencies. So make the investment in theft insurance. Losses due to a crime are not typically covered by commercial property insurance. This coverage includes things like employees stealing from the register, forgery, a burglary, and for the theft of cash and checks. There are even optional add-ons, like coverage if you or your employees are robbed while doing business offsite.
A big one for restaurants and event venues, or anyone with food inventory. Food spoilage coverage helps with things like a power outage or equipment breaks down causing you to lose inventory. There can be a deductible before getting reimbursed, so make sure you talk to your agent and know the facts. Food contamination also covers employee errors like mishandling the food and ruining it, or if the food arrives affected by a bacteria like E. Coli, among many other things.
Insurance. We may not like it, but we sure do need it. Plan for the unexpected and prepare yourself for every situation. That way, you can focus on running your business and building your future.
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