Table of Contents
Write a comment
Thanks for this great article
Thanks for your comment Betty Cheesman, have a nice day.
- Len Klem, Staff Member
hi everyone welcome back if you're new here my name is lena i'm a certified public accountant several weeks ago i started a new video series here on my channel that focuses on helping small business owners with the key concepts as well as various tips and tricks to help you run your business if you would like to get a quick refresher or maybe learn more about business working capital what exactly is profit margin what is self-employment tax etc those videos are already uploaded and available here on my channel i will provide links in the description below as you start your business you're laser focused on your products or services on selecting your business structure setting up your business accounts and making that first sale however i can tell you one thing we're not looking forward to do and that is shopping for and setting up our business liability insurance this just seems daunting and not too exciting to say the least but that can also be one of the biggest mistakes you'll ever make as a business owner a lot of unexpected things can happen and we all know that they do happen when we run a small business as your business grows having insurance will help you pay for various expenses such as property damage or even liability claims as with any insurance having this to fall back on will prevent you from having to make high out of pocket payments i think business liability insurance will help you handle an event that could completely destroy your entire business so with that said in this video i will share the basics that will help you get started with your own research and i will share the different types of business liability insurance that there are and help you select which one will suit you best now there are businesses that have been operating for a while and they may not have insurance at all while that may be luck if you don't have insurance your business is liable for all damages and legal fees out of pocket if anything out of the ordinary happens to your business including getting sued for example it could completely put you out of business and if you don't have business insurance you will be in a really bad place so while it may be true that some can get away without it generally it is not recommended just because it's not wise to take a chance when it comes to your business so first before you even start shopping for a business liability insurance you need to have a good understanding of how your business operates meaning what are the main processes the number of employees you have now and whether you think that the number will actually increase in the future do you or will you have equipment and determine if there is any physical property these are going to be the main drivers the main factors that will help you decide what type of liability insurance which we will discuss next will fit you best generally there are different types of insurance coverage available for small businesses the most common types can be split into four categories workers compensation employee dishonesty commercial access liability and business owners policy so let's focus on each one starting with workers compensation this liability insurance is recommended for small business employers and will protect both you and your employees if they become hurt or sick as a result of their direct work related responsibilities what this insurance does is provide weight replacement rehabilitation costs and medical benefits some business types probably need this insurance more than others for example if you have a landscaping company you really need this because there is a higher risk involved since your employees handle equipment if you have an online clothing boutique then maybe this is something that you can completely skip and save your money so with that said don't cut corners but do try to see if there is a high risk involving your employees duties and what potential consequences may be now let's talk about employee dishonesty liability insurance or sometimes it is called fidelity bond crime coverage or crime fidelity this would provide protection if your employee commits fraud the definition of fraud or fraudulent activity or criminal activity is really vast and depends on your industry generally it would include things like credit card fraud unauthorized fund transfers computer fraud or counterfeit fraud as someone who works in audit before i can tell you that depending on the size of your company you should have controls over your employees access to certain types of assets such as cash if you accept cash as a form of payment from your clients or maybe bank account access system access my clients were fortune 100 and fortune 500 companies and if you are interested i can create a video to share best practices with you regarding controls over assets and finances let me know in the comment section below that is something that you're interested in the third type of business liability insurance i want to talk to you about is commercial access insurance this is usually considered to be an added type of insurance protection to your business owners policy which we'll discuss next what this does is provide limits that exceed the underlying liability policy it does not broaden the stated coverage per your business owner's policy but it will provide higher limits on top of the original policy for example if your business is located let's say downtown and you're concerned that there may be public disturbances that would impact your business you should get access insurance liability that would essentially add that extra protection now moving on the fourth type of insurance is business owners policy which i believe should be considered by all who own a business in fact most businesses are required to have this but if yours isn't technically required i would still highly recommended your business owner's policy generally is an umbrella term that would include property and general liability coverages one of its greatest features is that you would be able to customize your specific coverage based on what your business actually needs so for example if you have a physical store and let's say one of your customers slips and falls you will need your general liability coverage to handle that situation for you if for example someone breaks a window and steals something at your physical location you will need to have property coverage insurance which is part of your business owner's policy so a similar situation can occur if you have a consulting business for example and so you don't have a physical office or a physical store you have a consulting business and you do your business online and let's say your customer decides to make a claim stating that they lost money due to your advice or due to your consulting services that you provided to them so whether or not you have a physical location a business owner's policy is a very good and helpful thing to have so i hope this video was helpful and provided some clarity and you learned something new if you found this video helpful and interesting please do me a big favor and subscribe to my channel it really helps my channel a l
Thanks manehod your participation is very much appreciated
- Len Klem
About the author
I've studied sociology of globalization at Quinnipiac University in Hamden and I am an expert in social network analysis. I usually feel annoyed. My previous job was insurance estate planner I held this position for 14 years, I love talking about die-cast toy and break dancing. Huge fan of Samantha Barks I practice boxing and collect antique.
Try Not to laugh !
Joke resides here...