Insurance Needs of the Small Business

Every business owner, no matter how big or how small, needs to make sure that the investment he has worked so hard to obtain is protected. A thorough review of what is needed to keep the business going in times of hardship, injury or illness is necessary, as is a review of all physical assets and their replacement values. Meet with a financial planner and review your projected earnings for the coming year and then map out a plan that will protect you, your employees and your small business from being swept away if disaster strikes.

Liability insurance is absolutely a must. You cannot pick up a newspaper, or hear a news report without the word “lawsuit” coming up at least a time or two. Someone is always suing someone else and more times than not, it is the business owner that loses out in the end. If your business is small, will it be able to handle litigation or the damage to your reputation? Will a single suit spell the end to your business venture?

The sheer number of differing policies is staggering, so it is wise to go with an expert on this one. Just include the estimated cost of insurance in your projected budget for the upcoming fiscal year, and then to be safe, add twenty percent. You can always adjust the actual amount once your review is completed.

If you only have one or two other employees, your amount needed for disability insurance will be minimal, but if you have more than that, it will be likely that you will have to cover them under workers compensation.

The number of employees varies from state to state, but in general, if you have more than four employees, they must be covered.

Workers compensation can be costly, but it is still cheaper than a lawsuit filed after someone slips on the floor in the employee lounge.

As a small business owner, you probably handle most of the day to day operations yourself. What would happen to those operations if you were not there to do them? If you became ill or were injured and had to be off work for a large amount of time, would your business survive? It would if you had disability insurance which would cover the cost of day to day expenses until you were able to get back to work.

Of course, there is also the cost of insuring the actual business site and the assets involved to consider.

You must make sure you have adequate coverage for the building and all of the equipment that you have. If your company uses vehicles, you must make sure you have good commercial automobile insurance. This is another area where good research, coupled with a good financial advisor will come in handy. Depending on the number of vehicles involved, it might be cheaper to insure as a fleet rather than individually.

You worked hard to start your business. You came up with a business plan and you built it up. You want to protect yourself, your employees and your future, so make sure that you review carefully and know exactly how much insurance your small business actually needs.

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