When starting a business it is important to think ahead and develop a plan for all aspects of your business. This involves taking steps to ensure the protection of your business's assets. Thus, insurance should be an essential part of your start up plan. Insurance allows a business owner prevent or reduce foreseeable/unforeseeable losses; however, there are many forms of insurance to choose from. Each form of insurance processes different benefits. Therefore, it is necessary for you as business owner to understand of the different types of insurance in order to decided which ones would be best for your business. The following will provided a brief insight in four different types of insurance: auto insurances, key man insurance, liability insurance, and asset protection insurance.
If your business processes any automobiles that are used strictly for work related proposes it is essential to properly protect them. Being involved in an accident with an improperly insurance vehicle can negatively affect you company; therefore, by insuring your vehicle with the right amount of coverage, you can protect your business's assets. Any business should process at least an absolute minimum coverage of $300,000/$100,00. This type of policy means that if an accident does occur, the insurance company would pay up to $100,000 for every person involved up to a total limit of $300,000 for the accident. Hence, this form of coverage would most likely allow you to settle to all injured parties without causes future losses on your assets.
Key Man Insurance
Key Man insurance is a type of life insurance policy that allows a business to insure a person. In other words, this person is an important asset or “key man” to the company and the business would suffer without the person. Thus this policy allows the business to receive monetary aid in the event that the key man dies. The money would allow the business to continue running as the company attempts to locate a replacement or settle any debt that might have resulted in the absence of the key man. This money can be used on typical business expenses. For example, the money gained could be used to fix any problems that might arise on the payroll until a replacement can be hired.
Liability insurance is a form of insurance that protects an individual from lawsuits that involves the person being liable due to negligence. For instance, if a customer slips and injures himself or herself in your store due to a puddle of water, liability insurance would provide aid in this situation by paying for any medical bills and prevent a lengthy lawsuit. Liability insurance, also, protects your business on work site as well. For example, you process a construction company and one of your employees, while working on the roof off a house, accidentally drops a hammer on the homeowner's car, the insurance company would pay the owner of the vehicle for the damages.
Asset Protection Insurance
Asset protection insurance is an extremely useful type of insurance. It allows a person to have many different forms of coverage on the company's assets. Usually this functions like similarly to homeowner's insurance in the sense that it typically covers a company's building and all assets within it. However, for those business owners who are working within niche markets, there are more precise policies that can be used. For instance, if you own a restaurant you can protect yourself in the event of a power outage by insuring all perishable items. Thus, the insurance company would reimburse you for all inventories that became spoiled.
In closing, it is vital to try to figure out every possible event that could result in a loss to your business and make sure that you take steps to prevent such losses. By buying the proper types of insurance to protect you company from lengthy and expensive lawsuits that could arise otherwise.