Starting A Business? What You Need To Know About Insurance

You’ve got a great idea for a business and the profitability margin projections are positive. The web site and logo are designed and your marketing strategy is in place. All signs are a go!

However, have you considered your insurance needs?

It’s important for entrepreneurs to cover their business assets, whether your entrepreneurial venture is a Small Business Entrepreneurship (i.e., grocery store, hairdresser, consultant, travel agent, internet commerce storefronts, carpenter, plumber, electrician, etc.); a Scalable Startup or a Social Entrepreneurship. Just like any business, your entrepreneurial idea is a valuable asset that needs protection.

Obviously, depending on the scale of your new business, the options will differ. Banas & Fickert Insurance Agency can guide you through the options and determine what you need. Here’s some of the basic policies you should consider following:

 

  1. Business Automobile Policy. A business automobile policy (BAP) provides coverage for a company’s use of cars, trucks, vans, and other vehicles in the course of carrying out its business. Coverage may include vehicles owned or leased by the company, hired by the company, or employee-owned vehicles used for business purposes. Coverage for cars rented for business use can also be included.
  2. Business Owner’s Policy. (BOP) Includes Insurance/Business Property Insurance/ General Liability Insurance. These types of policies can provide coverage for buildings, contents, inventory, equipment and tools, business income coverage, equipment breakdown, premises liability and cyber liability. The liability portion of a business owner’s policy offers coverage for third parties who suffer bodily injury, property damage, advertising injury or personal injury on a covered business’s premises or caused by the business’s owner or employees. In addition to standard coverages, most insurance providers offer optional additions or endorsements on business owner’s policies that business owners can use to tailor a policy to their specific needs.
  3. Workers Compensation Insurance. Workers’ compensation or workers’ comp is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee’s right to sue his or her employer for the tort of negligence. Should you have any employees, you need to carry this coverage per Massachusetts state law. This type of coverage will provide partial income replacement and pay the medical expenses should they get injured while working. For a Sole Proprietor, Partner, or LLC Member or LLP Partnership, this coverage can be “elected” into to provide partial income replacement and pay the medical expenses if hurt on the job.
  4. Umbrella Liability Insurance. Umbrella insurance refers to liability insurance that is in excess of specified other policies and also potentially primary insurance for losses not covered by the other policies. This provides higher limits of liability that goes over any applicable underlying policies. The umbrella liability does NOTreplace the underlying policies, it complements them by being able to carry much higher limits of liability than the underlying policies can provide.
  5. Cyber-insurance A specialty lines insurance product intended to protect businesses, and individuals providing services for such businesses, from internet-based risks, and more generally from risks relating to information technology infrastructure, information privacy, information governance liability, and activities related thereto. Risks of this nature are typically excluded from traditional commercial general liability policies or at least are not specifically defined in traditional insurance products. Coverage may include first-party coverage against losses such as data destruction, extortion, theft, hacking and denial of service attacks; liability coverage indemnifying companies for losses to others caused, for example, by errors and omissions, failure to safeguard data, or defamation; and other benefits including regular security-audit, post-incident public relations and investigative expenses, and criminal reward funds.
  6. Professional Liability Insurance/ Errors and Omissions (E&O) Insurance Professional liability insurance (PLI), also called professional indemnity insurance (PII) but more commonly known as errors and omissions (E&O) in the U.S., is a form of liability insurance which helps protect professional advice- and service-providing individuals and companies from bearing the full cost of defending against a negligence claim made by a client, and damages awarded in such a civil lawsuit. The coverage focuses on alleged failure to perform on the part of, financial loss caused by, and error or omission in the service or product sold by the policyholder. These are causes for legal action that would not be covered by a more general liability insurance policy which addresses more direct forms of harm. Professional liability insurance may take on different forms and names depending on the profession, especially medical and legal, and is sometimes required under contract by other businesses that are the beneficiaries of the advice or service. Professional liability insurance is required by law in some areas for certain kinds of professional practice.
  7. Commercial Inland Marine This category of insurance includes property coverage for construction equipment, medical diagnostic equipment, fine arts, solar panels and wind turbines, cameras and movie equipment, musical instruments, and a wide variety of other types of property. The inland marine insurance definition has evolved over time to cover a wide range of property and materials, including property in transit, property in the custody of a bailee, mobile medical equipment and contractors equipment.