Seven Different Types Of Insurance You May Need For Your Business!

Settling for the standard policy presented by insurance companies might cost you everything you own, even to the point of mortgaging future earnings. That's because the standard policy usually doesn't cover several areas vital to a small business person. There are at least 7 basic types of insurance, some mandatory, others prudent, and still others nice-to-have. Here's a brief description of some of the policies a small business person could use. Whatever you do, protect yourself and your employees by checking-out the carrier with your state insurance agency before you buy.

UNEMPLOYMENT INSURANCE
This is required in every state if you have employees. It pays benefits when an employee is terminated under certain circumstances. Each state sets amounts, limits, and how benefits are paid.

WORKER'S COMPENSATION INSURANCE
This plan pays for employee injuries on the job. You may be required to pay into a fund, buy state-mandated insurance, or join a self-insuring group (which may, in turn relieve you of normal liability when one of your employees is injured on the job). Some states permit very small companies to waive this insurance under certain circumstances. Beware! One employee claim could wipe you out!

STANDARD COVERAGE INSURANCE
This is the type of policy most business persons purchase. It has a bit of everything: some liability, limited theft and fire, and may include wind, hail, and other items. The limitations are many, and you could easily have a claim which would far exceed what the typical policy pays. An excellent start, but add on some other coverage to complete the picture.

EXTENDED LIABILITY INSURANCE
People sue businesses for any reason, and sometimes for no reason. You can be 100% right, and the cost of defending yourself could bankrupt you. Home based businesses sometimes can get an umbrella rider for their home owner policy; but location businesses will usually have to take out an extended liability policy. This insurance is not expensive, and coverage for $10 Million doesn't cost much more than $1 Million.

ERRORS & OMISSIONS/MALPRACTICE INSURANCE
These insurances are related. Anyone in the business of giving advice, showing someone how-to, doing something to or for someone, or consulting in any manner is especially vulnerable to suit by a disgruntled client. Errors and Omissions and Malpractice insurance can be costly, but are an absolute necessity. Shop around, rates vary quite a bit.

LIFE & DISABILITY INSURANCE
Whether you call it Key Employee, Partner Buy-Out, or something else, it's basically life and/or disability insurance on key company individuals. It's designed to allow the business to buy out the interests of the injured or deceased firm member. The policies can be expensive, but then again, what would it cost if you lost a key player?

HEALTH INSURANCE
It's getting harder and harder to go into business without paying for some form of employee health insurance. Our government is constantly working to devise a health plan fair to all, but you can put one in now that will provide your employees some protection while not costing both an arm and a leg. Do a lot of shopping, and ask for a guaranteed-renueable clause. Here are some suggestions:

1. Have a high deductible. This discourages casual use by having the employee pay the first dollars. With some of the money you save, you could contribute towards the deductible.
   
2. Limit family coverage. Don't pay the family coverage for an employee whose spouse is covered under another plan.
   
3. Offer only a major medical plan. This approach makes the employee responsible for day-to-day health care, while your program would help out for major care.
   
4. Insist on pre-admission review always. This could reduce in-hospital procedures, making them out-patient services.
   
5. Piggy-back on another company's policy. Trade associations, cooperatives, suppliers, or other business affiliates offer health insurance policies at reduced rates.

OTHER SUGGESTIONS
Look in the phone book for "Business Insurance". Just about any agent wants to write this type of insurance, but you will be far better off talking with an expert or two. Ask around. Don't settle for the first person.