Insurance for a Small Business

“I’m a woman who has no insurance for a small business. I have been operating a business out of my home for the last two years. I just found out that my homeowner’s policy does not cover me.

What kind of insurance for a small business do I need?”

Well congratulations on your success! It sounds like you may be going through a few growing pains (or should I say “growing gains”)?

Most insurance carriers recognize the growing and profitable market of home grown businesses (WAHMS in particular) and the unique challenges for insurance. You may have built up a sizable inventory in your basement and you’re starting to have fears about home invasion and theft. The UPS and FedEx trucks are popping up at your house on a regular basis. You’re receiving business guests with increasing frequency. The neighbors are curious about what you’re about.

…aahh… the price of success!

You’re at the enviable stage of wondering how to protect your assets.

Insurance for a Small Business

There is of course, coverage available for home-based businesses that will protect your inventory and business equipment.

What types of things should I be worried about?

Probably everything that keeps you up at night worrying about if something should happen such as…

• Your inventory

• Your income

• Do you have customers that leave things for you that they might sue you for if you lost or damaged them?

• Do you have a separate building on your property that you use for your business such as a garage or guest house that if damaged, your business would suffer a serious blow?

Sounds like I need a basic course! Can you boil it down for me in a nutshell?

I’ll try. Here are some of your basic choices:

Basic Form: works for you by covering losses due to

    • Fire
    • Lightning
    • Explosion
    • Windstorms
    • Hail
    • Smoke
    • Riot
    • Vandalism

Broad Form…is a step up for insurance for a small business and covers additional things like:

    • Water damage
    • Glass breakage of your building
    • Weight of snow or ice

Special Form…the top rung for insurance for a small business and covers all risk of physical loss unless there are “gotchas” or exceptions related to specific items by the policy.

I’ve got a Hummer as my company vehicle with advertising wrap showcasing my business. My assistant uses it whenever we need something. How would I cover that?

Wow! Have you thought about a Hybrid?

What does a Hummer get? Five miles per gallon?

Seriously, you’re right…you need business vehicle coverage…especially if you have employees running around in company cars.

At what point am I required to carry Workman’s Comp?

Well, the laws vary from state to state, so check in with the Department of Labor. Rule of thumb is three to five employees and you need to carry Workman’s Comp.

My assistant is actually an independent contractor…what then?

Be careful how you label an “independent contractor”. You might want to check in with an attorney and review your state’s laws on that. If your independent contractor is injured on the job, you’re held responsible and would have to pay out large sums of money that would have been covered by Workman’s Comp.

Anything else?

If you are involved in financial transactions and you’ve hired a bookkeeper, you can also insure against embezzlement. (Not that your sister-in-law would embezzle anything!).

If you are worried about:

    • Fraud
    • Burglary
    • Robbery

You need to have them added as endorsements.

What am I not covered for?

You will not be covered for…

    • Cash
    • Your vehicle

Good Luck!