By Richard Lipton
Richard L. Lipton CPA & Associates LLC
www.liptoncpa.com

Running a business is expensive and the capital that you’ve poured into your company can disappear in an instant if a major weather event damages your offices, or if someone in your shop gets injured while on the job.

Having the right kind of insurance is critical to your business and multiple insurance policies should be in place before you open your doors for business each day. And, they should be reviewed every year or when a business change occurs such as stocking new products or moving to a new location.

• Commercial Business Insurance: Commercial Property Insurance policies are either all-inclusive or risk-specific and protect your shop and its contents from damage caused by natural disasters, fires or vandalism.

• Product Liability ­Insurance is necessary if you manufacture or sell products, and safeguards you if a product defect causes injury to someone.

• For protection against lawsuits related to negligence claims, you need to consider both General ­Liability Insurance and Professional Liability Insurance, as well.

Other types of insurance your business might need include:
• Coverage that protects ­Directors and Managers from personal liability;
• Key Person Life Insurance;
• Business Interruption (covers lost profits and expenses);
• Commercial Vehicle Insurance; and
• Website Insurance (protects you from legal claims).

Employer-Related Insurance

Workers’ Compensation Insurance (administered by individual states) and Unemployment Insurance (under certain conditions) are mandatory in the U.S. Some states require employers to provide other types of insurance.

For example, if any of your employees are located in California, Hawaii, New Jersey, New York, Puerto Rico or Rhode Island, you will be required to provide disability insurance. Disability insurance is a benefit provided to employees who are unable to work because of illness or injury.

Employers are not required to provide life, medical and dental insurance for employees.

Some Insurance Tips
• Don’t under-insure, but don’t over-insure either.
• Assess your liability risk honestly and thoroughly.
• Ask your lawyer for advice.
• Get quotes from several companies.
• Talk to your insurer about how you can minimize risk and premiums.

Your insurance company will be your ally if you encounter legal problems because of an accident or injury that happens to someone on your property, to an employee working for you, or if a service you provide causes harm to someone.