Small Business Checklist Item # 7 – Insurance
To insure or Not to Insure? This is a good question, but the answer is simple……Get insurance! There are many of you out there that have not taken the time to look into good business insurance for whatever company you run. This is a very important part of business to protect your investment. We will not go into detail about all the insurance types out there for businesses, but we will show you some points to think about.
If you run a home-based business, which many people do now, you need to think about business insurance. Many people ask us if their home owners insurance will cover them, we tell them a flat out no. Most insurance policies are not geared toward home based businesses. If you have a loss of any kind and they find out that one room was for business purposes, they could deny that part of the claim. It has happened before. If you run a home based business, please check with your insurance company to see if they can add some more insurance to your business part. Many insurers will do so if they provide that type of coverage. While this is not the ideal situation, it helps. The best thing to do is to just go out and get an insurance plan just for your business. Most home based businesses can get coverage for around $200+/year. This depends on what you do and what type of products you are selling or making. While there are not many insurance companies out there that insure home based businesses, State Farm is one of them.
Our next point has to deal with people that are selling products from distributors or manufacturers, whether you are selling from inventory or dropshipping, you need to think about insurance. There is a notion going around that if you do not make the product, but only sell it, then you cannot be responsible for lawsuits. This is completely wrong. If you are part of the supply chain that provides goods to the end customer, then you can be brought into a lawsuit. The best way to protect yourself is to get product liability coverage as part of your general insurance coverage. This will cover you up to a certain amount if someone is injured by a product that you sold to them, even if you did not manufacturer it. So don’t think that since it is not your product, you are not held accountable, please think again.
If you are on the fence about business insurance, please take the time to learn about your liabilities and how you can be affected by your business practices. You do not want to end up losing everything because you did not want to get insurance for your business. If you have questions about insurance, please let us know and we will be happy to guide you in the right direction.