Monday, August 8, 2016

Small Business Owners Ask “Do I Really Need Insurance?”


Small business owners often struggle with the costs of insurance premiums. After all, small businesses frequently wrestle with the budget required to start and operate their business. Some small business owners think of insurance as an expensive necessity, sort of like a tax.

Despite the perception of some, business insurance is essential for all businesses because it protects the risk embarked upon by the business owner. Every entrepreneur is a risk-taker that faces innumerable challenges every day. Insurance improves the odds that the owner will face crippling losses due to fires, accidents, theft or other unforeseen events beyond the business owner’s control.

Insurance Is a Legal Requirement in New York

New York State requires businesses to carry certain types of insurance. If you have employees, you must carry workers’ compensation and disability insurance. You must carry vehicle insurance if you own a car or truck that is used for business purposes. Most landlords will require that you carry a certain level of liability insurance in order to protect the property as a condition of the lease. Banks or investors often require that you maintain life, business interruption, fire or other types of insurance so that their investments are protected.

Benefits of Coverage

Insurance has benefits and advantages that many small businesses don’t take into account. For example, insurance protects you from more than just disasters. Employee programs – such as health benefits – can help you attract and retain top-quality employees. Some owners borrow against their life insurance or retirement fund as a way to raise capital. Insurance makes your business a more attractive investment and is looked on favorably by banks and supplier creditors. In addition, property insurance will replace equipment, supplies and other items in the case of a fire; loss of business income will be minimized if you carry the right type of business insurance.

Strategic Business Insurance Planning

It is important for business owners to plan strategically in order to protect their business needs and risk. If you don’t have adequate coverage you could lose a lifetime of work and investment in an instant. Take the time to make informed decisions based on forethought and planning, just like other parts of your business plan. The first step is to reach out to a professional insurance agent, broker or consultant who can explain the different types of New York business insurance and can help you create an effective insurance program for your business.

Understand the Risks

Understanding the risks that exist is the first step in developing an adequate business insurance plan. Here are some business risks you need to plan for:

·         Property damage - Fire, flood, vandalism, storms, other natural disasters)

·         Business interruption Fire is a common reason but there are many others. Business interruption insurance covers data backup and recovery, setting up in a remote location, even employee payroll while you are replacing equipment and repairing damage.

·         Injury – Workplace injuries are a common unexpected cost for business owners. Make sure you are protected.

·         Liability – Businesses are at risk for law suits due to allegations of accidental injury, libel, slander and other unanticipated results of day-to-day business.

 Assess the Costs

 Take the time to evaluate the costs of the possible risks faced by your business. Start with the largest loss exposure and work from them. Consider the highest deductible you can afford because the cost of different policies vary depending on how much risk you are willing to keep. Avoid duplicative coverage but make sure you don’t shortchange your business with less coverage than you really need. Set up a schedule for reviewing your insurance needs periodically as business growth may indicate the need for additional coverage.

 Insurance is an important tool you need to protect your business investment. Contact an experienced insurance professional at Tanner Insurance Agency to discover how we can help you make important decisions about the insurance needs of your business. We provide service you can count on, from people you can trust. Call us today at 888-484-2467.


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