Do You Have The Insurance You Need?

by Richard Avdoian

Recently I was invited to join a few insurance agents for lunch, and I took the opportunity to ask what insurance policies businesses and corporations should have but are unaware of or do not feel are necessary.

They admitted that insurance is not the most interesting or stimulating topic, and they are aware business owners dread or avoid talking about it and the cost involved. Insurance professionals are often avoided at networking events for these reasons. That’s until a business is in a crisis or has experienced fire/water damage or is being sued. Then the agent is its best friend.

I asked what is the most frequently asked question insurance agents hear from business owners and CEOs. They looked at each other and in unison said, “How much do I really need?” Many business owners believe there is no real need for insurance beyond health, workers compensation and payroll coverage. The real answer is that you need enough insurance to cover your business completely.

Here are the policies businesses can’t do without:

• General liability is needed for small businesses, corporations and even home-based businesses. The policy provides both defense and damages if you, your employees, your services or your products are negligent or are alleged to have caused property damage to a third party or bodily injuries.
• Property covers real estate, improvements made and personal property (such as computers, fixtures, furniture and office equipment), which protects you from a fire, vandalism, theft, smoke damage, etc.  
• Business owner’s policy is a package that lumps together all required coverage a business needs (including but not limited to business interruption insurance, property, vehicle and liability). Policies can be altered to accommodate a company’s specific needs.
• Commercial auto protects a company’s vehicles that transport employees, equipment or products from damage and collisions. If employees use their own vehicles on company business, you should consider nonowned auto liability to protect the company in case the employee does not have insurance or has inadequate coverage.
• Professional liability, commonly known as “error and omissions,” provides defense and damages for failure to render professional services or for rendering them improperly. This insurance is applicable for any professional firm, including accountants, consultants, lawyers, notaries, real estate agents, professional speakers, business coaches and technology providers.
• Personal umbrella is something you may want to consider if you want coverage above and beyond your existing policies. This insurance can cover different kinds of claims and is used only when liability on other policies has been exhausted. Not having sufficient umbrella coverage could financially wipe out your business.

Here are a few others insurance policies to consider: business interruption/loss of earning, data breach, directors and officers, accounts receivable/credits, inland marine.                        

It may not happen today or tomorrow, but you never know. All it takes is one event (theft, holdup, fire, customer lawsuit) and you will be thankful you made the investment.

To sleep worry-free, you may want to consult with your insurance agent to be certain you have all the necessary insurance policies you need to sleep soundly and protect your business. I know I am.

Richard Avdoian is president/CEO of the Midwest Business Institute Inc., a business consulting and training firm.  For information about training and seminars, contact Richard at 618-972-8588 or Richard@RichardAvdoian.com.