Protecting Your Business with the Greatest Insurance Options

This post is in: Articles

Running a business is a wonderful endeavor and one of the greatest things one can undertake. When you have your own business you have obviously overcome many great struggles and hardships. Starting up a business is very challenging and can prove to be a daunting, yet rewarding task. Your business is one of the most important things in your life and once you have it up and running, you do not want to see it get ruined. So, one of the best things that you can do is to protect your business, and yourself, by purchasing business insurance.

Why Getting Business Insurance is Important

Business Insurance is crucial because this is the one thing that will help protect you against damages to your company, a diminishing economy, and a loss of sales and income. When you get insurance you are providing yourself with a great sense of security that your investments are not a complete waste. Also, when getting business insurance, it proves that you are a reliable, honest, and safe company. People are more likely to trust you and see that your business is one that they should support and purchase goods and/or services from.

Property Insurance: The First Step of Getting Sufficient Business Insurance

Business themed collageThe first type of insurance you should get when insuring your business is property insurance. This is a type of insurance that protects your physical properties: land, buildings, equipment, etc. Property insurance is important in case there is a fire, flood, theft, natural disasters, and acts of terror/war. There are two different insurance policies that you can use under property insurance; these are named perils and open perils policies. A named perils policy is when each specific disaster or mishap needs to be listed in the agreement in order for it to be covered by the insurance. An open perils policy is the complete opposite of a named policy, meaning that the individual disasters and mishaps do no need to be listed in the agreement to be insured by your insurance. Obviously both have their perks, with a named perils policy usually costing less than an open perils policy. So, you must decide which one works best for you and your business by evaluating each peril and predicting the ones that could actually occur in your area. This will help you in deciding which type of policy, either open peril or named peril, will best serve your business.

How the Payout Works With Property Insurance for your Business

Your payout for your insurance claim will be based on which type of insurance coverage you have purchased. The three different types of property insurance coverage for your business include: replacement cost coverage, actual cash value coverage, and alternate habitual coverage. With the replacement cost coverage the insurance company will pay for the actual replacement and/or repairing of any damage to your property. This means that they directly pay the rebuilding expenses and so the premiums that you have are not based on what the cash value of your business is. Actual cash value coverage is one option you have where the insurance company will pay you directly for the cash value of your property. This means that it will subtract for depreciation (when the actual value of something decreases due to age). Alternate habitual coverage is when the insurance company will pay for other physical arrangements when your property is uninhabitable. So, with this type of coverage you would be provided with an alternative option for conducting your basic business needs and some additional needs if it is reasonable. This type of coverage does not include providing another location for actually providing your goods and services, for that you would need to add on a business income insurance plan.

Business Income Insurance: The Last Step in Properly Insuring Your Business

After you have properly insured the physical property of your business, the next step is to make sure you have insurance for all your business’s income. The income is one of the main reasons you have started your business, and so it is crucial that you have made sure it is sufficiently insured. This type of insurance is added to your property insurance and will be paid out if the property insurance does not completely cover the insurance claim. The types of things that are covered by business income insurance include: a temporary location to provide your services, fixed costs (the typical costs of running your business), extra expenses (covering some costs that the fixed costs do not cover, which allows you to still run your business), civil authority ingress/egress (when your business is shut down due to a government degree), and most importantly the profits that you would have earned if a peril had not occurred.

For a business insurance plan contact the David Hirth Agency at 507-359-8989 today!