Starting a new business is exciting. It’s also a major commitment of your time and money. Among the many tips for small business owners that a potential entrepreneur is likely to hear from friends and neighbors, few will address a key issue: protection from common risks. Here are some essential questions to keep in mind to help your new enterprise get off to a successful start.
Could your business operate smoothly if you were unable to work?
Small business protection can keep your business healthy. As a business owner, you can purchase different types of disability income and life insurance policies that can help safeguard your business and ease your cash flow worries if you were unable to work due to a serious illness or injury, or if a key employee passed away suddenly.
You can choose options that can
- Reimburse up to 100% of covered everyday overhead expenses connected to your business, such as rent, utilities, and employees’ salaries and benefits
- Safeguard your business’s ability to pay loans and other contractual financial obligations
- Protect your firm if you or your business partner are unable to continue working due to sickness, injury, or death by allowing the healthy partner to purchase the other partner’s share
- Buy an individual disability income policy to protect yourself in the case that you’re unable to work due to an illness or injury
- Consider whole life insurance to help protect your heirs or business partners if you or a key employee passes away
Do you have property insurance for your business?
Depending on the type of business you own, you may need to purchase this type of insurance. It limits your responsibility and compensates you in case of losses related to your property, including damage from fire or theft. It covers not just the building where you work, but its physical contents, including office furnishings, machinery, computers, and other items you use to run your business. Some policies may cover equipment breakdowns, removal of debris after a fire, and some types of water damage.
Are you prepared in the event of a lawsuit?
Liability insurance – also called casualty insurance – can help protect you against the claims of others. As a small business owner, you’re probably well acquainted with the idea of protecting your business from liabilities, whether they’re the result of injury, mistakes, or negligence. Many small business owners, particularly those in partnerships or sole proprietorships, put their business as well as personal assets at risk. There are generally three types of liability insurance:
- General liability insurance – This is the main coverage that protects your business from lawsuits if you or your employees are sued for negligence, or for causing bodily injury or property damage to another. It also covers claims for libel and slander.
- Professional liability insurance – Also called errors and omissions coverage, this insurance may be required by law, depending on your profession. Doctors, for example, are required to have malpractice insurance to practice in certain states.
- Product liability insurance – This protects a business in case someone gets injured from using a product that the business sells or manufactures.
- Business owner’s policy – This can be a convenient option, combining multiple types of insurance coverage into one package.
Do you provide benefits to your employees?
Among the advantages of small business ownership, one looms large: nobody tells you what to do. That said, if you want to expand at all, you need employees. While small companies may not have to offer them, benefits do count. Why? Employees rely on them. Benefits offered through work are becoming more and more important to Americans. Especially in today’s competitive marketplace, you can attract and retain employees by offering benefits packages that promote their health and financial confidence.
Some of the most popular workplace benefits include medical, dental, and vision insurance; disability insurance; life insurance; and retirement savings vehicles such as 401(k) plans. Other benefits you may consider offering include cancer insurance, accident insurance, critical illness insurance, and travel insurance.
Many employees say they need more guidance in selecting benefits, so it’s important to educate them and make the enrollment process easy and convenient. Choose a provider that offers educational materials, personal service, and ongoing support, so your employees will have everything they need to make more informed benefits decisions that are right for their needs.
It’s important to take the time to speak to a financial professional to be sure that you’re adequately protected, and remember that you’ll need to re-evaluate your coverage whenever your needs change.
By making sure that you’re covered against the unexpected and rewarding your employees, you’re also protecting the time and investment that you’re putting into the vision you’re building.