Insurance Basics for Businesses PDF

## Getting Your Business Off the Ground ### Insurance Basics * Transfer risk and exemption from loss incurred by any course of action. * Insurance payout is called **Indemnity**. * An insurance policy outlines the specifics of the contract between your business and the insurance company. *...

## Getting Your Business Off the Ground ### Insurance Basics * Transfer risk and exemption from loss incurred by any course of action. * Insurance payout is called **Indemnity**. * An insurance policy outlines the specifics of the contract between your business and the insurance company. * At a minimum, the policy lists the: * Policy term * Coverage * Premiums * Deductibles ### Finding the Right Insurance Company and Agent * Large companies often employ full-time risk managers. * Most small business owners do not have this benefit. * Finding the right insurance company and agent is important to the risk management process. * There are two types of agents: * **Those who work with only one insurance company, and independent agents who can shop around for policies with competing companies.** * Regardless of which type of agent you choose, it is important to find a professional you can trust. * Your agent will provide you with a wealth of knowledge on insurance and risk management topics and help you assess your insurance needs. ### Required Coverage * The law may require you to carry a certain level of coverage, such as workers' compensation, unemployment, and vehicle insurance. * Many construction contracts require a contractor to maintain certain types of insurance and coverage levels. * The following chart gives an example of how insurance coverage requirements might be outlined in a contract. ### Types of Insurance | **Type of Insurance** | **Minimum Insurance Coverage (Combined Single Limit Per Occurrence / Aggregate)**| |:---|:---| | Commercial General Liability including | $3,000,000 / $3,000,000 | | Premises - Operations | | | Products/Completed Operations | | | Contractual Insurance | | | Property damage | | | Independent Contractors | | | Bodily Injury | | | Automobile Liability Owned, Non-owned, or Rented | $3,000,000 / $3,000,000 | ### Workers' Compensation & Occupational Diseases * As Required by Applicable Laws ### Employer's Liability * $3,000,000 ### Site Survey & Added Risk * It is important to conduct a site survey to assess any special conditions that may cause added risk to a project. * You should also consider the nature of each project to be sure you have adequate coverage for the work you are performing. * Talk to your insurance agent and add supplemental coverage when necessary. ### Focus on Policies For Construction Industry * In this chapter, we will focus on policies that apply to the construction industry, but you should consult with your insurance carrier for a plan that is right for you and provides your business with the best protection. ### Property Insurance * Property insurance typically covers your business and personal property when damage, theft, or loss occurs. * You can buy property insurance to cover specific risks such as fire or theft, or you can purchase a broad-based policy to cover a variety of risks (including fire, theft, vandalism, and "acts of God" such as lightning strikes). * In considering property insurance, evaluate your physical location and the region in which you do business to determine which risks are likely to occur, such as hurricanes or floods. ### Types of Property You May Want to Cover * ✓ Buildings and other structures (owned or leased) * ✓ Furniture, equipment, and supplies * ✓ Inventory * ✓ Machinery * ✓ Computers/Tablets * ✓ Intellectual property, (i.e., books and documents) * ✓ Automobiles, trucks, and construction equipment * ✓ Intangible property (i.e., good will, trademarks, etc.) * ✓ Leased equipment