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New year, new opportunities.
As we start into the new year, it’s a great time to plan, set goals and resolutions and re-evaluate current choices, both for individuals and small businesses. Small businesses – all 30.2 million of them in the US – should take advantage of the momentum of the new year to review their business practices, vendors and setups.
There are many decisions that a small business owner needs to make in order to be successful. One of those is determining the type of insurance they need to protect their property, employees and products. Federal law mandates that small business owners must have workers’ compensation and unemployment, while some states also require additional insurance, like disability insurance.
• Start with General Liability Coverage: General liability insurance can provide coverage for bodily injury or property damage from incidents that occur on your premises or from your products or operations, certain legal defense costs if your company is sued, and reputational damage due to libel, slander or copyright infringement.
• Commercial Property Insurance is a must-have: Commercial Property Insurance is the starting point for business insurance. These policies cover buildings you own or rent from fire, smoke, wind, hail, storm, hurricane, tornado or vandalism damage. It also covers desk, equipment, tools, computers and your business’s files. Additional policies can be purchased on a state basis for flood or earthquake damage.
• Workers’ Compensation Insurance is required: Most states have a workers’ compensation insurance requirement. Each state will vary with the number of employees that a company must cover. The insurance covers the costs if an employee is involved in a work-related injury. Check with your insurance broker to see if you must purchase it from a state-run program (i.e., North Dakota, Ohio, Washington, and Wyoming), or if you can buy it from your broker.
• Think about adding disability insurance: Short or long-term disability insurance is an additional coverage to workers’ compensation addressing off-the-job illness and injury. If your business is located in California, Hawaii, New Jersey, New York, Puerto Rico, or Rhode Island, your business is required to purchase disability insurance for your employees.
• Ask about a business owner’s policy (BOP): Ask your insurance agent if they offer a business owner’s policy which bundles commercial insurance coverages, such as general liability and property insurance coverage. A business owner’s policy is a type of commercial insurance policy that bundles insurance coverages that you would normally separate. The bundled approach can also provide discounts to the overall cost.
• Cover possible business interruptions: Business interruption insurance is additional coverage to commercial property insurance. It protects your business against loss of income if there is an issue that disrupts operations at your normal location due to a fire at your neighbor’s locations that impacts your productivity.
• Consider Employment Practice Liability Insurance (EPLI): Every business owner must protect themselves in the event of an employment-related claim. With Employment Practice Liability Insurance, employers are protected for certain employment-related legal disputes between employers and their employees, former employees and job applicants such as age, race, sex discrimination, sexual harassment, retaliation, failure to promote and wrongful termination.
• A Cyber Liability Policy is a must have: Credit card data, names, phone numbers, addresses, driver's license numbers, health records, and even social security numbers can quickly find themselves in the wrong hands with a few strokes of the keyboard. Cyber liability insurance can protect your company against damages for a network security or privacy breach in which customer data or corporate confidential data is exposed or stolen by a hacker.
• Set up unemployment insurance: If your business has employees, you are required to provide unemployment insurance which allows your employees to collect unemployment if they stop working for your organization. Each state has its own state unemployment insurance coverage which is often referred to as SUI or SUTA, and your tax payments are calculated during the payroll process.
• Contemplate adding Professional Liability Insurance: If your business provides a service, you might consider adding professional liability insurance, which protects against dissatisfied customers. Keep in mind that personal liability on a homeowner’s insurance policy does not protect home-based businesses for professional use.
• Cover transporting product with Inland Marine Insurance: Property insurance is location-specific and a business’s products are usually only covered within 500 feet of their business. In order to cover product that is moving by boat, airplane or truck, you should consider Inland Marine Insurance.
• Insure Company Vehicles: Commercial auto insurance protects your company vehicles. The coverage is vehicle specific and does not travel with the driver. You might also consider adding non-owned auto liability to your policy for employees who are using their own personal car for business purposes.
• Protect convention trade-show booths and employees: A trade-show booth is an extension of your business. If your company exhibits at many conventions throughout the year, you may need trade-show-specific liability insurance, which will cover you if an employee, a volunteer, or a visitor to your booth is injured in the convention hall.
• Understand your needs: Each business has its own unique insurance risks and requirements. Since there are several commercial insurance options, you must understand the level of risk before you choose your coverage.
• Protect home-based small businesses: A homeowners’ policy does not protect a home-based business. Be sure to add a rider to the policy that would cover your home-based business.
• Offer employee healthcare: Employee health insurance is not a part of small business insurance commercial coverage. However, depending on the number of employees, you might be required to offer healthcare options. The Affordable Care Act (ACA) mandates that employers have sponsored healthcare coverage for businesses with 50 employees or more.
• Compare insurance policy quotes: Comparing quotes from multiple providers when you are looking for small business insurance can get you the most comprehensive coverage for your insurance needs at the best price.
• Have a good agent or broker: An insurance agent is the person that you rely on to protect your business. Just as you compare your options for your insurance plan, consider and compare different agents or brokers.
• Always review and update the policy every year: Your business’s needs change and so should your insurance. Most insurance policies must be renewed and can be updated every year. Make sure to review the policy, coverage and any changes for the upcoming year.
Disclaimer: This material is for informational purposes only and is not legal or business advice. Neither AmTrust Financial Services, Inc. nor any of its subsidiaries or affiliates represents or warrants that the information contained herein is appropriate or suitable for any specific business or legal purpose. Readers seeking resolution of specific questions should consult their business and/or legal advisors. Coverages may vary by location. Contact your local RSM for more information.
As we start into the new year, it’s a great time to plan, set goals and resolutions and re-evaluate current choices, both for individuals and small businesses. Small businesses – all 30.2 million of them in the US – should take advantage of the momentum of the new year to review their business practices, vendors and setups.
There are many decisions that a small business owner needs to make in order to be successful. One of those is determining the type of insurance they need to protect their property, employees and products. Federal law mandates that small business owners must have workers’ compensation and unemployment, while some states also require additional insurance, like disability insurance.
Small Businesses Insurance Tips
Insurance is not a one-size fits all. There are so many types of small business insurance policies that the types you choose could be very important for your business depending on what you do. To start off the new year with the proper insurance information, here are 19 small business insurance tips.Building Your Small Business Insurance Policies
Before you launch your small business, it imperative to investigate and invest in the following insurance policies:• Start with General Liability Coverage: General liability insurance can provide coverage for bodily injury or property damage from incidents that occur on your premises or from your products or operations, certain legal defense costs if your company is sued, and reputational damage due to libel, slander or copyright infringement.
• Commercial Property Insurance is a must-have: Commercial Property Insurance is the starting point for business insurance. These policies cover buildings you own or rent from fire, smoke, wind, hail, storm, hurricane, tornado or vandalism damage. It also covers desk, equipment, tools, computers and your business’s files. Additional policies can be purchased on a state basis for flood or earthquake damage.
• Workers’ Compensation Insurance is required: Most states have a workers’ compensation insurance requirement. Each state will vary with the number of employees that a company must cover. The insurance covers the costs if an employee is involved in a work-related injury. Check with your insurance broker to see if you must purchase it from a state-run program (i.e., North Dakota, Ohio, Washington, and Wyoming), or if you can buy it from your broker.
• Think about adding disability insurance: Short or long-term disability insurance is an additional coverage to workers’ compensation addressing off-the-job illness and injury. If your business is located in California, Hawaii, New Jersey, New York, Puerto Rico, or Rhode Island, your business is required to purchase disability insurance for your employees.
• Ask about a business owner’s policy (BOP): Ask your insurance agent if they offer a business owner’s policy which bundles commercial insurance coverages, such as general liability and property insurance coverage. A business owner’s policy is a type of commercial insurance policy that bundles insurance coverages that you would normally separate. The bundled approach can also provide discounts to the overall cost.
• Cover possible business interruptions: Business interruption insurance is additional coverage to commercial property insurance. It protects your business against loss of income if there is an issue that disrupts operations at your normal location due to a fire at your neighbor’s locations that impacts your productivity.
Supplemental Small Business Insurance Coverage
In addition to the core of the small business insurance policies shared above, there are supplemental business insurance coverage that need to be considered:• Consider Employment Practice Liability Insurance (EPLI): Every business owner must protect themselves in the event of an employment-related claim. With Employment Practice Liability Insurance, employers are protected for certain employment-related legal disputes between employers and their employees, former employees and job applicants such as age, race, sex discrimination, sexual harassment, retaliation, failure to promote and wrongful termination.
• A Cyber Liability Policy is a must have: Credit card data, names, phone numbers, addresses, driver's license numbers, health records, and even social security numbers can quickly find themselves in the wrong hands with a few strokes of the keyboard. Cyber liability insurance can protect your company against damages for a network security or privacy breach in which customer data or corporate confidential data is exposed or stolen by a hacker.
• Set up unemployment insurance: If your business has employees, you are required to provide unemployment insurance which allows your employees to collect unemployment if they stop working for your organization. Each state has its own state unemployment insurance coverage which is often referred to as SUI or SUTA, and your tax payments are calculated during the payroll process.
• Contemplate adding Professional Liability Insurance: If your business provides a service, you might consider adding professional liability insurance, which protects against dissatisfied customers. Keep in mind that personal liability on a homeowner’s insurance policy does not protect home-based businesses for professional use.
• Cover transporting product with Inland Marine Insurance: Property insurance is location-specific and a business’s products are usually only covered within 500 feet of their business. In order to cover product that is moving by boat, airplane or truck, you should consider Inland Marine Insurance.
• Insure Company Vehicles: Commercial auto insurance protects your company vehicles. The coverage is vehicle specific and does not travel with the driver. You might also consider adding non-owned auto liability to your policy for employees who are using their own personal car for business purposes.
• Protect convention trade-show booths and employees: A trade-show booth is an extension of your business. If your company exhibits at many conventions throughout the year, you may need trade-show-specific liability insurance, which will cover you if an employee, a volunteer, or a visitor to your booth is injured in the convention hall.
Tips for Small Business Owners When Considering their Insurance Needs
Insurance isn't just about the types of coverage. It is also important to keep these tips in mind:• Understand your needs: Each business has its own unique insurance risks and requirements. Since there are several commercial insurance options, you must understand the level of risk before you choose your coverage.
• Protect home-based small businesses: A homeowners’ policy does not protect a home-based business. Be sure to add a rider to the policy that would cover your home-based business.
• Offer employee healthcare: Employee health insurance is not a part of small business insurance commercial coverage. However, depending on the number of employees, you might be required to offer healthcare options. The Affordable Care Act (ACA) mandates that employers have sponsored healthcare coverage for businesses with 50 employees or more.
• Compare insurance policy quotes: Comparing quotes from multiple providers when you are looking for small business insurance can get you the most comprehensive coverage for your insurance needs at the best price.
• Have a good agent or broker: An insurance agent is the person that you rely on to protect your business. Just as you compare your options for your insurance plan, consider and compare different agents or brokers.
• Always review and update the policy every year: Your business’s needs change and so should your insurance. Most insurance policies must be renewed and can be updated every year. Make sure to review the policy, coverage and any changes for the upcoming year.
AmTrust’s Comprehensive Suite of Small Business Insurance
AmTrust offers a comprehensive suite of small business insurance solutions from workers’ compensation policies to commercial property coverage to general liability to fit your business’s needs. Contact us to find out more about our multiline or monoline insurance policies to give peace of mind that your business is covered for 2019 and beyond.Disclaimer: This material is for informational purposes only and is not legal or business advice. Neither AmTrust Financial Services, Inc. nor any of its subsidiaries or affiliates represents or warrants that the information contained herein is appropriate or suitable for any specific business or legal purpose. Readers seeking resolution of specific questions should consult their business and/or legal advisors. Coverages may vary by location. Contact your local RSM for more information.
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