QUESTION: I need guidance in selecting the right insurance for my small business. Any suggestions you can offer will be appreciated.
ANSWER: The first step is to select a qualified insurance agent.
You should solicit recommendations from other business owners. Local trade associations and the chamber of commerce also are a good source for references.
Compile a list of agents and then interview each.
What you are looking for is experience with businesses similar to yours. Ask the agents for the names of other clients and determine their level of satisfaction.
True insurance professionals take advantage of continuing education programs and can be identified with designations as Certified Insurance Counselors, Chartered Property and Casualty Underwriters, and Chartered Life Underwriters.
Insurance is broadly grouped in two categories — property and casualty, and life and health. Both are specialties, and it is uncommon that one agent is an expert in both.
Some types of property and casualty insurance that you may need are:
- commercial auto: to protect your business from both liability and physical damage losses resulting from your use of an automobile;
- commercial general liability: to protect against certain other lawsuits arising out of the conduct of your business;
- product liability: to protect you from claims for damages sustained by customers’ use of your products, either sold or installed;
- workers’ compensation: to protect you from claims by employees who are injured on the job;
- commercial property: to cover loss to your building and contents from fire, wind, lightning, theft and vandalism, to name a few;
- flood insurance: to protect your business property from flood damage;
- business interruption and extra expense: to pay for lost revenue and additional expenses resulting from covered damage to your building and contents; and
- inland marine: to cover property in transit or away from your premises.
Insurance to be considered in the field of life and health include:
- life insurance: for funding buyout agreements between business partners, securing business loans and the loss of key people;
- life and health insurance: to protect you, your employees and their families from the financial consequences of death, sickness or non-job-related accidents; and
- disability insurance: to cover lost wages due to prolonged sickness or disability.
There might be other exposures to consider, and each situation might be different. This is why you need the advice of a professional agent who specializes in commercial insurance.
Gray Poehler is a volunteer with the Richmond Chapter of SCORE, Counselors to America’s Small Business. To ask a question or request free and confidential business counseling, go to Richmond.score.org/mentors. Learn more about SCORE’s workshops on the website or by calling (804) 350-3569.