How to Purchase Property and Liability Insurance to Legally Protect Your Small Business
No matter what type of small business you own, chances are you will need insurance. For most businesses, a combination of property and liability insurance is sufficient, but you should know all the specifics in order to legally protect your small business.
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Instructions
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Know How Property Insurance Protects Your Small Business
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Know that property insurance covers damage to the physical assets associated with your small business. This covers any fire damage, theft, vandalism or water damage to anything that is inside your business.
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Realize that property insurance can also cover any lost income due to damages that were covered by property insurance.
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Designate your property insurance to specifically name potential causes of damage or purchase a policy that covers everything.
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Recognize that property insurance also covers business possessions such as trademarks and copyrights.
Know How Liability Insurance Protects Your Small Business
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Understand that liability insurance protects you and your business from being sued for property damage or injury.
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Know that liability insurance covers employees, customers and visitors to your business.
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Realize that professional liability insurance can protect you when being sued for errors that you may commit while performing your job.
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Understand that liability insurance can cover lawsuits regarding intellectual property as well libel or slander cases.
Purchase Property and Liability Insurance for Your Small Business
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Talk to an insurance agent or broker. An insurance agent works for one insurance company and can only sell you policies from the company he or she represents. An insurance broker is open to multiple insurance companies in order to find the policy that works best for you.
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Know that you should purchase property and liability insurance before your first day of business to legally protect yourself from anything that may happen on the job.
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Set aside at least one day to thoroughly research your insurance policy options, or one to two hours to find a good agent or broker. Budget another two hours to carefully review your policy before signing the contract.
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Tips & Warnings
Liability insurance is usually legally required by landlords when you are renting or leasing property.
Be sure to inventory all of your possessions before you purchase an insurance policy so that you are completely covered.
If you do not have liability insurance, you can be held financially responsible if anyone names your business in a lawsuit.
Read the fine print of your property insurance contract to see what is not covered. For instance, some policies may exempt damage from earthquakes, hurricanes or infestations depending on where your business is located.
