Depending on the nature of the business entity, a business may need several types of insurance to guarantee coverage in the event of a claim. A business may need contents insurance to cover inventory and supplies. Second, general liability insurance may be necessary to cover accidents that occur on the property. Business owners may also want to obtain coverage on motor vehicles used for business purposes.

Besides insurance for the business itself, a business owner may want to obtain insurance for the business’s products and actions. If the business performs repairs or services, completed operations insurance may be necessary to cover occurrences when a customer claims injury or damages after using something that was fixed by the business. To cover claims arising from the business’s products, the business owner will want product liability insurance for injuries or damages stemming from product malfunction. For professional services, such as a law firm or medical practice group, professional liability insurance may be necessary to cover damages.

For business owners running their businesses from their homes, it is especially important to obtain insurance on the business. In fact, business activities in the home may even void a homeowner’s policy, so home-business owners should consult with their insurer about their insurance coverage. Home-business owners may be able to obtain a rider for a homeowner’s policy, a new in-home business insurance policy or a Business Owner’s Package (BOP) policy.

For businesses that rent space, I always recommend business interruption insurance that will at least cover the cost of the rent.  If the business is a franchise, this insurance should cover any minimum monthly obligations to the franchisor and others.  This type of insurance typically covers the closure of the business due to causes beyond the policy holder’s control such as hurricanes, construction, and other unforeseen causes.

In flood prone areas, flood insurance on the inventory may be desirable as well.

It is a good idea for every business to have a team of professionals to turn to for expert advice.  This team should consist of at least a good business attorney, accountant and insurance professional.

This article is not intended to provide legal advice and does not create an attorney client relationship.  For more assistance with your specific questions please contact us.