Insurance is an essential part of running a successful business. As you'll see, policies come in all-shapes and sizes.
Business owners face many risks. Let's talk about business insurance to protect what you have.
Commercial liability insurance protects your business against lawsuits. Remember the McDonald's customer who spilled hot coffee on herself sued McDonald's, and won? A jury decided it was McDonald's fault she got burned. The moral of the story. Always have adequate commercial liability insurance.
- Commercial liability insurance: Protects your business against lawsuits
- Property insurance: Protects the hard assets of your business against loss from theft and fire
- Health insurance: Helps defray healthcare costs
- Disability insurance: Replaces most of your income should you become disabled
Property insurance covers buildings, equipment, furniture, computers, and other company assets against loss from theft and fire. In other words, it protects the hard assets of your business. You may need a special rider to insure large pieces of equipment, Laptop computers, and leased equipment.
If your company owns vehicles, have high liability limits on the corresponding insurance policies. You may be obligated to maintain certain minimum limits if your company has contracts with a government or governmental agency.
Companies that do not own vehicles should consider getting a rider to cover non-company owned cars and trucks. This adds another layer of protection against claims that could arise from car accidents involving employees conducting company business. You should also require employees to maintain liability insurance on their own vehicles.
Health insurance is very costly. Consider a health savings account as an alternative to an HMO or PPO. You could save thousands of dollars by making the switch. The law changed almost two years ago, allowing businesses and individuals to have such accounts.
Disability insurance, which replaces most of your income should you become disabled, can be much less costly for business owners when purchased as a group policy. If you are considering a disability policy for yourself, consider a group policy instead. A group can be as few as three people.
Group policies often cost only slightly more than an individual policy, yet they enable business owners to offer disability insurance as an employee benefit. This can help you retain key employees.
lf you are the sole breadwinner in the family or a single parent, a disability policy is a must. Individually, a woman business owner will pay higher rates for disability insurance. The cost drops when she is part of a group, however.
You have worked hard to build your business. Don't make a mistake by not having proper insurance, use it to protect it and your family.
About the author
Armando G. Roman CPA/PFS MBA has more than 25 years of experience providing clients with advice and counsel regarding financial matters and their monies. Mr. Roman speaks fluent Spanish and is a former columnist for La Opinion, the nations largest Spanish-language daily newspaper. He is the incoming chairman of the board of directors of the Arizona Society of Certified Public Accountants, chairman of the Audit Committee of Maricopa Integrated Health Systems, and a board director of the Arizona Hispanic Chamber of Commerce. He lives in Paradise Valley, Arizona, with his wife and three children. He can be reached at firstname.lastname@example.org