Friday, May 2, 2008

Small Business Insurance - Is Your Company Under Insured?

Many people who study small business report that 80% of small businesses do not carry enough insurance to protect themselves. One mishap can be a disaster to an underinsured business, and can ruin or setback all of the hard work that the owners and employees have put in to develop, grow, and maintain the venture.A small company with one location can be very vulnerable to losses caused by storms or vandalism, and are seldom in a good position to replace their equipment and supplies. One flood or fire could take out computers, machines, or account records. Small companies do not usually have replacements at their fingertips, and without insurance coverage, the business could be ruined financially. Beyond the danger of natural damage caused by fire or storm, intentional theft or vandalism could be even worse because it could target a company right where is the weakest.Beyond damage, liability can be underestimated by many small business owners. However, just one injured employee or customer, who files a suit, can ruin a small business. Even if the company is not at fault, the cost of a legal defense may be so huge that it can cause losses and layoffs. If your business provides professional service, rather than physical products, you may need to consider a type of professional liability insurance.Every business should consider the need for three basic types of coverage. The first is property insurance which will cover a building, equipment, and supplies against manmade and natural damage. Secondly, a business should consider liability insurance. One type of liability insurance may cover a business against professional errors, and that is usually purchased by lawyers, accountants, and insurance agents. Another type of liability insurance will protect a company against any injury caused by its products, and that would be purchased by a manufacturer. Also, workers compensation insurance is another type of insurance that will protect a business owner from employee injury claims.Compare Commercial Insurance Rates and learn about Types of Business Insurance You Needhttp://www.minibiz.usArticle Source:

Thursday, May 1, 2008

What 90% of All Small Business Owners Don't Know About Small Business Insurance!

There are several factors that you should take into account when determining what forms of insurance coverage you want: how large or small your small business is, how it's organized (partnership, sole proprietorship, corporation, LLC), the number of employees, how you get paid (commissions, salary, fees), whether your small business is service or product oriented, your exposure to liability and location.Things to ponder:Heaven forbid, but do you have more than enough insurance to protect your spouse and children? If you have a small service business, your small business is worth Zero when you die. For example, the spouse of a deceased doctor or lawyer can only sell the tools of the trade, not the clients (the true bread and butter of any small service business). If you can predict when you might die, you could sell it ahead of time. But that's not very likely, so you and every small service business owner should make sure that you protect your family with at least seven times your gross income. So, if you make $100,000 per year then you should have over $700,000 in insurance.If your goal is to have a member of your family take over your small business at your demise, are they capable (and licensed) to do so?What happens if you get ill or suffer an injury and can no longer run your small business? Do you have disability insurance? Disability insurance will generally pay about 60% of your income for a stated period of time. The benefit may be taxable or non-taxable (depending on whether or not you deducted the premium as a business expense.)Even more important is your answer to this question: Do you have "business overhead insurance"? Who will cover the costs of running your small business (utilities, insurance, salaries) while you're out of commission? Unless it is an add-on, your small business overhead expenses will not be covered by your disability insurance.Got business partners? Do you have a buy/sell agreement? Well, if you or your partner should suddenly die, your interest in the business will be protected. Here's a great example of this: your partner dies and his wife wants to claim her share of the business. What if your partner's relatives have no idea how to operate the business? Would they be asset or a liability? Well, if you have this type of insurance coverage, you could avoid all of this interference by outside parties by simply buying out your partner's share of the business.What about "disability buy-out coverage"? Do you have it? If your partner becomes severely disabled, what would you do? Would you simply keep paying him or her even though you are doing all of the work... possibly for months or even years to come? Well, when you have "disability buy-out coverage", you would never have to wory about this situation because after a period of time, your disabled partner would be forced to sell his share of the business to you.Of course, many of these situations may not occur, but it's your small business. Now, all you have to do is speak to a professional to determine what forms of insurance coverage you want to protect your small business.Edward Brancheau created The Bank of Green to advise small businesses about subjects like workers compensation insurance and to help individuals build wealth through their home equity.Article Source: