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Many types of insurance are purchased by small businesses to protect themselves from a wide variety of risks. Other types of insurance are purchased by small businesses to protect their employees from certain types of risks. These types of insurance are sometimes provided to employees as a benefit of employment.

Overview

Like home insurance, business insurance protects the contents of your business against fire, theft and other losses. To learn about the specific types of insurance coverage that is required for businesses in a specific area, contact your insurance agent or broker. It is prudent for any business to purchase a number of basic types of insurance. Some types of coverage are required by law, others simply make good business sense.

Types of business insurance

The types of insurance listed below are among the most commonly used and are merely a starting point for evaluating the needs of your business.

Liability Insurance

Businesses may incur various forms of liability in conducting their normal activities. One of the most common types is product liability, which may be incurred when a customer suffers harm from using the business product.There are many other types of liability, which are frequently related to *Insure U -specific industries. Liability law is constantly changing. An analysis of your liability insurance needs by a competent professional is vital in determining an adequate and appropriate level of protection for your business.

Property

There are many different types of property insurance and levels of coverage available. It is important to determine the property you need to insure for the continuation of your business and the level of insurance you need to replace or rebuild. You must also understand the terms of the insurance, including any limitations or waivers of coverage.

Business Interruption

While property insurance may pay enough to replace damaged or destroyed equipment or buildings, how will you pay costs such as taxes, utilities and other continuing expenses during the period between when the damage occurs and when the property is replaced? Business Interruption (or "business income") insurance can provide sufficient funds to pay your fixed expenses during a period of time when your business is not operational.

"Key Man" or "Key Person"

If an individual is so critical to the operation of a business that it cannot continue in the event of your illness or death, you should consider "key man" or "key person" insurance. This type of policy is frequently required by banks or government loan programs. It also can be used to provide continuity in operations during a period of ownership transition caused by the death or incapacitation of an owner or other "key" employee.

Automobile

It is obvious that a vehicle owned by your business should be insured for both liability and replacement purposes. What is less obvious is that you may need special insurance (called "non-owned automobile coverage") if you use your personal vehicle on company business. This policy covers the business' liability for any damage which may result for such usage.

Office and Director

Under some circumstances, officers and directors of a corporation may become personally liable for their actions on behalf of the company. This type of policy covers this liability.

Home Office

If you are establishing an office in your home, it is a good idea to contact your homeowners' insurance company to update your policy to include coverage for office equipment. This coverage is not automatically included in a standard homeowner's policy.

External links

• Independent Insurance Agents & Brokers of America - national association of independent insurance agents & brokers. Website includes guides to terms and products, along with tools to find independent insurance agents.
• Insure U - A small business web resource maintained by the National Association of Insurance Commissioners.