How to Insure a New Business

Your new business may encounter problems as it begins to promote goods and services in the community. A flood or fire in your production facilities could damage your inventory or one of your employees might fail to place a warning on an electronic product. You can insure your new business against liability and loss of property with the right insurance policy.

Instructions

Difficulty: Moderate

Things You’ll Need:

• Deeds and rental agreements for facilities
• Roster of employees

Purchase Insurance for Your Small Business

1. Become conversant in current business insurance issues by reading the right literature. Visit TSBIC.com for answers to frequently asked questions about small business insurance (see Resources below). Some business magazines also feature resources for grading the best and worst insurance companies on the market today.
2. Review the health, dental and auto insurance offerings of a potential business insurance provider. Most forms of business insurance do not provide for employee benefits. If you can find a deal on a wide range of insurance policies from one carrier, you can simplify the claims process.
3. Search for specialized insurance policies if your new business requires coverage specific to a particular industry. Farms, construction companies and real estate firms require insurance coverage that exceeds the financial limits of general business insurance.
4. Determine the presence of liability insurance before you allow a company to insure your business. Liability coverage limits the amount of legal action that a consumer or competing company can take against your employees.
5. Avoid damage caused by natural disasters with business interruption insurance. When you find business interruption insurance, you insure yourself against damage done by floodwater, fire and earthquakes. These types of policies focus on protecting your inventory and equipment from irreparable harm.
6. Protect your company's vehicles with business vehicle insurance. Like regular auto insurance, business vehicle coverage helps your company recoup losses from car accidents and vandalism. You should note that insurance restrictions are high for business vehicles because they are only meant for use during office hours.

Tips & Warnings

• Compare local insurance companies with national providers before committing to an insurance policy. A local insurance firm may provide discounts for a new business that specializes in a particular industry. National insurance companies typically charge lower rates to new businesses because of a higher volume of clients.