What insurance products does your Colorado business need?
Are you starting a new business in Colorado or Denver? If so, there are some insurance products you should consider purchasing for numerous reasons. Not only will the insurance protect your business from a potential loss that could derail the business in its early phases but you may also be required by other entities you partner with, rent from, or some other business relationship to have insurance in place. Orcutt Insurance Group is a local Colorado insurance agency helping new businesses with insurance since our founding in 2004. Please contact us to discuss insurance and your business.
Below is a recent article from etrepreneur.com that discusses the insurance products your new company should consider. These products include general liability, workers compensation, business auto insurance, business property insurance and umbrella liability. From the article:
One of the most common mistakes startup business owners make is failing to buy adequate insurance for their businesses. It’s an easy error to make: Money is tight, and with so many things on your mind, protecting yourself against the possibility of some faraway disaster just doesn’t seem that important, but it doesn’t take much to destroy everything you’ve worked so hard to build. Following is a closer look at the types of business insurance most entrepreneurs need.
The basic business insurance package consists of four fundamental coverages—workers’ compensation, general liability, auto and property/casualty—plus an added layer of protection over those, often called an umbrella policy. In addition to these basic needs, you should also consider purchasing business interruption coverage and life and disability insurance.
Workers’ compensation, which covers medical and rehabilitation costs and lost wages for employees injured on the job, is required by law in all 50 states. Workers’ comp insurance consists of two components, with a third optional element. The first part covers medical bills and lost wages for the injured employee; the second encompasses the employer’s liability, which covers the business owner if the spouse or children of a worker who’s permanently disabled or killed decides to sue. The optional element of workers’ compensation insurance is employment practices liability, which insures against lawsuits arising from claims of sexual harassment, discrimination, and the like.
Generally, rates for workers’ comp insurance are set by the state, and you purchase insurance from a private insurer. The minimum amount you need is also governed by state law. When you buy workers’ comp, be sure to choose a company licensed to write insurance in your state and approved by the insurance department or commissioner.
Comprehensive general liability coverage insures a business against accidents and injury that might happen on its premises as well as exposures related to its products. For example, if a visiting salesperson slips on a banana peel while taking a tour of your office and breaks her ankle,.general liability covers her claim against you. Or let’s say your company is a window-sash manufacturer, with thousands of window sashes installed in people’s homes and businesses. If something goes wrong with them, general liability covers any claims related to the damage that results.
There’s one difficulty with general liability insurance: It tends to have a lot of exclusions. Make sure you understand exactly what your policy covers … and what it doesn’t. You may want to purchase additional liability policies to cover specific concerns. For example, many consultants purchase “errors and omissions liability,” which protects them in case they are sued for damages resulting from a mistake in their work.
If your business provides employees with company cars, or if you have a delivery van, you need to think about auto insurance. The good news here is that auto insurance offers more of an opportunity to save money than most other types of business insurance. The primary strategy is to increase your deductible; then your premiums will decrease accordingly but make sure you can afford to pay the deductibles should an accident happen.
Pay attention to policy limits when purchasing auto coverage. Many states set minimum liability coverages, which may be well below what you need. If you don’t have enough coverage, the courts can take everything you have, then attach your future corporate income, thus possibly causing the company severe financial hardship or even bankruptcy. You should carry at least $1 million in liability coverage.
Most property insurance is written on an all-risks basis, as opposed to a named-peril basis. The latter offers coverage for specific perils spelled out in the policy. If your loss comes from a peril not named, then it isn’t covered.
Make sure you get all-risks coverage, then carefully review the policy’s exclusions. All policies cover loss by fire, but what about hailstorms or explosions? Depending on your geographic location and the nature of your business, you may want to buy coverage for all these risks.
Whenever possible, you should buy replacement cost insurance, which will pay you enough to replace your property at today’s prices, regardless of the cost when you bought the items. For example, if you have a 30,000-square-foot building that costs $50 per square foot to replace, the total tab will be $1.5 million. But if your policy has a maximum replacement of $1 million, you’re going to come up short. To protect yourself, experts recommend buying replacement insurance with inflation guard. This adjusts the cap on the policy to allow for inflation.
In addition to these four basic “food groups,” many insurance agents recommend an additional layer of protection, called an umbrella policy. This protects you for payments in excess of your existing coverage or for liabilities not covered by any of your other insurance policies.
For the entire article please visit: http://www.entrepreneur.com/article/244868
Let us know if we can help with any of your insurance needs.
Thank you for your consideration.
The Orcutt Group Team