Insurance Coverages: What you Need to Protect Your New Business

By Aurelius J. Licata, AAI
Licensed Insurance Agent
CEO: Licata Management Corp.
and Rockland Score Mentor

Every start-up business requires insurance as protection from the exposure of many risks. A lawsuit could easily force a business to dissolve before it even has the chance to begin performing. As the owner of Licata Insurance Agency, and a small business owner, I am familiar with the specialized insurance requirements and the potential dangers that may pertain to an array of different business. Over the past 4o years of my professional insurance career, I have had the experience and satisfaction of guiding many people through the process of obtaining coverage that is right for them, their business, and their business specific exposures.

As insurance is a very business specific instrument, I will take the liberty of using very broad strokes to describe basic insurance principles and coverages to create an insurance landscape panorama, if you will. I highly recommend that any new business obtaining coverage seek the advice and guidance of an insurance professional for a more concise review and explanation.
This article provides all potential business owners with an introduction and awareness of all forms of general insurance as well as specific legal and business requirements, inclusive of business license requirements and lease hold requirements.

Professional Liability Insurance:
Professional Liability Insurance a/k/a Errors and Omissions (E&O) insurance, provides coverage for business against negligence claims arising from claims due to harm that may result from mistake or failure to perform. Every industry has its’ own set of concerns and would respectively require a customized policy.

Property Insurance:
This coverage applies to a business whether it owns or leases its space. This coverage is crucial and is afforded to equipment, signage, inventory and furniture in the event of a loss from any covered peril. Business income insurance is also available to recover loss of business or business interruption.

Workers’ Compensation Insurance:
Compulsory coverage, which should be immediately undertaken to provide coverage for any and all employees medical treatment, disability and death benefits in the event an employee is injured or dies as a result of his work with that business.

Home-Based Businesses:
It is common for professionals to begin their businesses in their homes. Homeowner’s policy does not cover home-based businesses in the way that commercial property insurance can. If you operate a business out of your home, you will also need to additional insurance to cover equipment and inventory.

General Liability Insurance:
Although this coverage is not required by law, most lease-hold arrangements between tenant and landlord contain a general liability provision as a clause of the lease.

Vehicle Insurance:
Any vehicle owned by the company should be insured to protect the business against liability exposure should an accident occur.

Take-away:
Insurance should be part of an overall plan for a business to avoid financial loss due to a catastrophic event or a lawsuit. Consult with your insurance professional to discuss the insurance best suited to your form of business and put that coverage protection into effect quickly.

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