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Do you need business insurance?


When small business owners are getting started, many of them neglect one of the most important things, small business insurance. Insurance is often looked at as an unnecessary expense because many of the things it protects against never actually happen. Although this may be true, it is important to have because it can protect your business from an expensive lawsuit.

In practically every business setting, accidents are bound to happen. While they may be more prominent in some business settings, they can happen to any business owner, leaving them with a large debt load and damage to equipment and employees. Having insurance will replace your equipment, cover the employees health care costs, and cover the costs of any damages done to your customers or their property. Even if the customer doesn't immediately claim any injuries, they can still sue you for future costs that result from the physical injuries they may have had from an accident on your site. When you add up the costs of the medical bills alone, it's no question weather or not you should purchase small business insurance.

To purchase small business insurance, seek the advice of a professional attorney. They can help you look over what type of coverage you need and the potential workplace hazards at your facility. Having an attorney present when you are talking to an insurance agent will also help you get a lower rate. Unfortunately some insurance agents will try to mark up the price in order to make a large commission.

Take a look at several different insurance options. Some packages will cover the cost of injuries sustained from an accident while others will cover the costs the equipment that was damaged. No matter what, the insurance must protect you personally from being liable from any workplace accidents. Without liability insurance, people can personally sue you and come after your home, your money, and your belongings.

If you are choosing to lease or rent office space, landlords often require you to have some type of business insurance. This is not only to protect your business, but to protect their property as well. For example, if you run a small restaurant and a grease fire burns down the building, your insurance will be expected to cover the costs. While the landlord often has insurance, you also need to have it to cover everything inside your office space. Most landlords will have insurance that covers the building (in the event that you burn it down) so you will need to pay an additional monthly amount to cover the cost of their insurance.

Before you sign on the dotted line, take a good look at what you are signing. The insurance policy should cover several things:

  • Natural disasters (earthquakes, tornados, hurricanes)

  • Floods and fires

  • Property

  • Buildings

  • Medical-related costs due to injuries sustained on-site

To help the insurance company get a good idea of how much coverage you need, add up the costs of all your assets. It may also be beneficial to take pictures of your assets and write the total cost under the picture, that way you can ensure that you have the exact costs. Every time you purchase new equipment or you make any modifications, be sure to include this information as well. Typically the business insurance will include your property and all the assets that you need to properly operate it.

Depending upon the geographic location of your business, you may need to pay extra for natural disaster insurance. Although the chances of a natural disaster may be slim, the extra cost normally isn't that much money and it can save you thousands of dollars in the event of a natural disaster.

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