From the very first day, a new business owner opens a business, you take on the element of risk. Before the first employee is hired and before the first invoice is sent, your new business needs to have an insurance plan in place to confront the plethora of challenges that the marketplace has to offer.
1. Commercial Auto Insurance. If your new or existing business is one that operates a fleet of vehicles ( i.e.distribution, supply, or delivery) then a comprehensive commercial policy covering all vehicles is the way to go. In many cases, the client does not have company vehicles per se but allow their employees to use their vehicles in the normal course of everyday business. In this case, your business should have non-owned auto liability insurance to protect those employees using their vehicles for the benefit of the business.
2. General Business Owner's Policy. This type of policy can act as an "umbrella" in covering your business in the areas of business interruption, property damage, vehicle coverage, liability, and crime/theft. The bundle of insurance products under this policy may seem expensive but it costs far more to purchase each policy separately in most instances. Make sure that you get the coverage that is tailor-made for your specific enterprise.
3. General Liability Insurance. The amount and type of general liability insurance to purchase will largely depend on the kind of business you operate. Even if you run the business out of your residence, you will still need to purchase this insurance in the event of casualty or personal injury damage.
4. Property Insurance. Property insurance is different than general liability insurance so make sure that you do not confuse the two. With property insurance, you will be covered in the event of a catastrophe to your business including coverage of equipment, computers, inventory, or tools. The policy you select should include protection for fire, theft, and smoke damage. There are special riders that can be purchased for business interruption and loss of earning in the event your business is shut down due to property damage. While these riders can be expensive in certain cases depending on the coverage selected, clients have indicated to me that when they have needed it has saved them lots of money.
5. Home Based Business. The Katz Law Group has many clients who start and continue their businesses in their homes. If you are a business that works from home be careful. The standard homeowner's policy does not cover your home-based business. You will need a separate liability policy for that purpose. For example, if a client comes to your house and gets injured in your office or going into your office through a separate entranceway those mishaps will not be covered by your basic home insurance policy.
6. Credit Insurance. This is particularly important if your business sells either goods or services on credit. It will cover your business in the event that your customer does not pay you for the goods or services supplied. This happens all of the time. If your business sells goods or services on credit then you may want to take a closer look at this insurance option.
7. Cyber Insurance. Talk about a growing area of insurance coverage. Once your company has been hacked, you will well understand the need for such coverage. With cyber insurance, you will be protected in the event of a data breach involving, for example, confidential and sensitive employee data and financial information. In some cases, you can obtain cyber insurance as part of a general business owner's policy. Again, whether purchasing cyber insurance and whether to purchase it as part of a general business owner's policy will depend heavily on your business and business needs.
We know how a business operates and we understand risk. Our deep litigation and business experience allow us to assist our clients in a number of different business areas. Put our nearly 40 years of experience to work for your enterprise. Call the Katz Law Group at 508-480-8202.