5 Forms of Insurance to Consider for Your New Business
Are you launching your own business? Congratulations! Business ownership can be a personally and financially rewarding experience. While owning a business can be challenging at times, you may also see tremendous growth in a short period of time.
The last thing you want is to endanger your business and all your hard work by leaving yourself vulnerable to risk. You can protect yourself by developing a comprehensive insurance strategy that mitigates the most dangerous risks and reduces your level of vulnerability.
Below are five common types of insurance that business owners use to manage risk. Before you open your doors for business, consider what types of protection you may need.
Property and Casualty Insurance
Depending on your type of business, you may have invested a significant amount of money in costly physical assets, such as a building, equipment or even vehicles. Those assets are important to your business’s continued operations, and damage to those assets could severely impact your cash flow.
There are various forms of property and casualty insurance to protect your most valuable physical assets. For instance, building damage insurance could protect your facility from costs related to weather damage, criminal activity and more. Vehicle insurance protects you from costs related to damage incurred while your fleet is out on the road. There’s even insurance available to protect important documents that can’t be easily replaced.
Create an inventory of your physical assets. Then sit down with your insurance agent to learn how to protect them.
We live in a litigious society. Any perceived wrong or slight can result in a lawsuit. Some people may even file a lawsuit without having good reason. The suit may not go anywhere, but it could be inconvenient enough to cost you time and money.
There are various types of insurance to mitigate this risk. Liability insurance could protect you if someone claims they are injured on your property or as a result of your work. Errors and omissions (E&O) insurance could also be helpful if you’re in a service business. It can protect you financially in case someone sues you over advice that cost them money or over poor service on your part.
Employee Health Insurance and Benefits
As your business grows, you may find that your employees are your most valuable assets. Without skilled and talented employees, it’s difficult to scale and expand. To be successful in business, you may have to be successful at recruiting the best of the best in your field.
A strong employee health insurance plan can help you do that. Given the costs of health care, many employees view benefits with the same level of scrutiny that they use to analyze compensation, culture and more. They also may look for items like dental insurance, wellness plans, a health care savings account and more.
What would happen if you became injured or ill and were physically unable to work? How would the business survive? And how would you continue to support yourself?
Many entrepreneurs face these questions. That’s especially true for business owners who are heavily involved in the company’s operations and production.
Disability insurance is one way to protect yourself from a financial standpoint. It provides income in the event that you are physically unable to work. You could use that income to support yourself or to hire someone to take your place so you could still keep the business alive.
Similar to the challenge of disability, the prospect of an unexpected death should also be a serious consideration for your business. What would happen to your business and your family if you passed away? Both would likely face significant financial challenges.
Life insurance can provide the liquidity your family needs to keep the business running. If you have partners, they could use the benefit to buy out your share from your family.
You also may want to consider buying life insurance on key employees, such as an innovative executive or your top salesperson. Their loss could set the business back, and you may struggle to find a replacement. Life insurance can help resolve pressing financial concerns after their death.
For more information, contact us at Ambrose Financial & Insurance Services in Walnut Creek, California. We welcome an opportunity to consult with you and help you launch your new venture. Let’s connect today and start the conversation.
Ambrose Financial and Insurance Services, LLC does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance.
This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.
15819 – 2016/6/20