Business Insurance Needs to Consider

How familiar are you with the various types of coverage that your business may need?

Every business needs insurance, but your particular requirements will depend on a number of factors, including the size and type of your business and the amount of risk you're willing to assume. If your business provides personal services—or if you're operating without a corporate structure—you must consider your personal risks as well. You may want to work with an insurance professional to make sure you have the protection you need.

Here are seven types of insurance that you may want to consider.

Health insurance

Many businesses provide health insurance as part of their overall employee benefit program. As the cost of health insurance continues to rise, consider having employees pay some part of the cost. If you have a small business with only a few employees, a group plan to cover employees and your family may be a smart choice. By being part of a group and having employees pay part of their costs, you could improve your coverage while incurring only minimal additional costs.

Health insurance issues:

  • To contain costs, have you considered sharing the cost with employees and choosing levels of deductibles and co-pays that result in lower costs?
  • What type of plan do you have? What else is available?
  • What kind of coverage do you have? What else is available?
  • What are the deductibles and co-pays?
  • What are the total costs?
  • What is the source of the policy?

Property insurance

Just about every business should have insurance to cover loss or damage to property, inventory or equipment. Premiums vary according to the type of property, coverage limits and what you insure against. If you have electronic equipment such as computers, be sure to investigate how your policy works in case of damage to the files (for example, as a result of power outages or surges) as well as damage to the equipment itself.

Property insurance issues:

  • Have you made a list of all equipment that needs to be covered? Be sure to include original cost, estimated value and identification information.
  • What are the deductibles?
  • What are the total costs?
  • What is the source of the policy?

Business interruption insurance

If your business were to be displaced because of a fire, flood or other disaster, you would need to reestablish it in another location. Business interruption insurance could provide the needed funds. Temporary space, equipment and supplies could be covered by a policy of this type.

Business interruption insurance issues:

  • Have you made a list of what would be required in case of an emergency?
  • What are the total costs? (Depending on the extent of your needs, business interruption insurance may not be too expensive.)
  • What is the source of the policy?

Liability insurance

This insurance can cover damages as a result of your actions or negligence, or if someone is injured at your place of business. For example, large damage awards have been made in cases where a customer slips and falls because the business did not melt the ice in front of the door. Be sure to discuss this type of coverage with a qualified insurance professional to ensure that you're adequately covered.

Liability insurance issues:

  • Is coverage provided through other policies that you currently hold or are considering?
  • What are the deductibles?
  • What are the total costs?
  • What is the source of the policy?

Workers' compensation insurance

This insurance provides coverage for medical and related costs for accidental injuries suffered by employees in performing their duties. The amount of coverage required varies by state.

Workers' compensation insurance issues:

  • Have you discussed your needs with an insurance professional?
  • What are the total costs?
  • What is the source of the policy?

Auto insurance

If you use an automobile—even a personal one—you may be required to have a commercial auto insurance policy. If you are a sole proprietor and use your car, be sure to discuss this with your auto insurance provider.

Auto insurance issues:

  • Have you discussed your needs with an insurance professional?
  • What are the deductibles?
  • What are the total costs?
  • What is the source of the policy?

Ownership equity protection

You have contributed countless hours and personal sacrifices to build your business. But without a business succession plan, the value your business represents to you and your family could evaporate overnight. A business succession plan funded with insurance will help in the event that you or one of your partners die, become disabled, or leave.

Factors to consider:

  • Is your entire household income generated from the business?
  • Have you personally guaranteed your business loans?
  • Is the majority of your net-worth tied to the value of the business?
  • Do you have a successor or written plan to transfer ownership?
  • Do you have a current valuation for the company?
  • If you have partners, do you have a buy-sell agreement in place? Is it funded?

Umbrella insurance

This relatively low-cost coverage fills in the gaps of your other policies or provides additional coverage once the original policy limits are exceeded. This can be extremely valuable when large losses are involved. Many insurance companies offer umbrella policies, and you may find that one of your professional organizations has a relationship with an issuer that will keep your cost low.

Umbrella insurance issues:

  • Have you checked with professional organizations to see if they offer umbrella policies?
  • What are the total costs?
  • What is the source of the policy?

The bottom line

Most businesses need more than one type of insurance coverage. Spend some time to consider all your needs and the ways that different policies can be structured for your business—it'll be well worth the time and effort. Managing and growing a business is difficult enough without having to worry about lack of coverage should unforeseen events occur.

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McGriff Insurance Services, Inc. CA License #0C64544. 


The information provided is not intended to be legal, tax, or financial advice. BB&T hopes you find this information useful but we cannot guarantee that it is accurate, up to date, or appropriate for your situation. You should consult with a qualified attorney or financial advisor to understand how the law applies to your particular circumstances or for financial information specific to your personal or business situation.

McGriff Insurance Services, Inc., and McGriff Seibels & Williams, Inc., are subsidiaries of Truist Insurance Holdings, Inc.

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