Business Insurance

Business Insurance

Running a small business requires a significant investment.  Business insurance is an insurance to protect against operational losses incurred by the business.

There are types of losses covered by a Business Insurance policy depending on the insurance company, wording in the policy and local limitations.  It minimizes financial risks associated with the death or injury of a key employee, lawsuits or natural disasters.

Key Person Insurance is so vital to individual businesses that loss of that particular person can cause considerable damage to the company’s financial future.  It is very important to purchase enough coverage to cover business assets.

Benefits are paid if the key person covered experiences a disability which prevents that key person from working or if the key person dies.  Remaining owners or partners can use this benefit only for legitimate business expenses, such as buying the key person’s stake in the business or hiring and training expenses for a replacement.  Another name for Key Person Insurance is a Buy/Sell Agreement.

Because Business Insurance spreads the risk costs among all businesses with coverage policies, a business may experience a rate increase where no claims were filed.  However, the replacement costs for individual businesses are generally considered higher, making purchasing Business  Insurance a wise decision regardless of the size of the business or length of time it has been operational.