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Basic Insurance for a Small Business

Many small businesses don’t think they need insurance or don’t expect to ever use insurance.  When owners or decision makers look at expenses, many wonder about the expense of “buying a piece of paper and a promise”.

Truth is, every business comes with risk, small or big!  Employees get hurt, people can slip and fall in your office, fires, theft and many other things can happen.  You also have landlords and lenders requiring insurance in certain circumstances.  Here are some of the basic insurance policies available that small businesses should consider, and why:

GENERAL LIABILITY.  Protects your business against any injury that you, an employee, your product or service causes to a third party.  Typical limits are $500,000 per incident and $1,000,000 aggregate.  If you have a home-based business, the typical homeowners insurance policy excludes coverage for business operations.  In addition to protecting your business as described above, most Florida Counties require a business to have General Liability insurance.  When leasing a space, your landlord normally requires this coverage as well.

PROPERTY.  Desks, copiers, computers, and other equipment used in your business should be protected from damage or loss by fire, theft, wind, and water damage from broken pipes to name a few perils. If you own the building, it too should be insured.   If you borrowed money to buy these items, your lender will insist upon insurance.

WORKERS COMPENSATION.  If you are in any type of Construction business and have one or more employees, you are required by state law to protect them with Workers Compensation Insurance.  If you are in any other type of business and have four or more employees, it is required by the state.  WC protects the business against injuries or death that may happen to employees while on the job.  It also pays the medical expenses incurred for injuries on the job, and extends disability payments to the injured employee until they can come back to work.

CYBER LIABILITY.  This is a newer type of insurance that protects your business against damage from computer intrusions or getting hacked.  There are computer viruses that damage software.  There are hackers that steal information.  There are hackers to lock up your system and demand a ransom to unlock it.  Cyber Liability helps cover the costs to repair software, forensic costs to discover how it happened, and credit protection for customers who may have had their identities or credit card information stolen from your system.

Statistics show that most businesses fail in the first three years.  Having proper insurance in place will help you keep your business running in the event of a tragedy.  There are other insurances available, such as Umbrella, Crime, Employment Practices Liability, and Directors and Officers, but these basics will get you up and running and help continue your success.  Feel free to contact us for your insurance needs or clarification of available coverages.

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