Friday 1 November 2013

The Essential Guide To Small Business Insurance

Business Insurance
More than 40 percent of employers have frozen new employee hirings, anticipating increased insurance costs from Obamacare, according to a Gallup poll commissioned by the employment law firm Littler Mendelson. But many businesses do not realize health care is only one of the insurance concerns facing them. The Small Business Administration (SBA) advises entrepreneurs of the other types of insurance that may be required, depending on the industry, location and lender's requirements.

Even when business insurance is not legally required, it may be advisable to protect the best interests of a company and its owners or partners. Get familiar with these insurance options to help you avoid financial and legal problems stemming from being underinsured:

Employee Insurance

Does the new Affordable Care Act require your company to provide your employees with health insurance? Strictly speaking, the answer is no, but you may face penalties if you are a larger employer and do not make certain levels of insurance available. For penalties to kick in, you must have the equivalent of at least 50 full-time employees. If this applies, possible penalties vary depending on your specifics. If you do not provide coverage, and at least one employee receives a premium tax credit or cost sharing subsidy in an exchange, you may owe a penalty. If you do provide coverage, you must offer specific minimum levels of coverage to avoid penalties.

State laws generally require you to carry worker's compensation if you have W2 employees. This protects you if an employee gets injured on the job.

Liability Insurance

Some small business owners incorporate as limited liability companies to protect themselves, not realizing that this is not the same as having liability insurance. Business liability insurance comes in a number of forms. General liability insurance protects you and your employees against claims of accidents, injuries or negligence. This protects you against payments involving bodily injury, medical expenses, property damage, damage to reputations and legal fees. As a rule, most businesses should carry general liability insurance, even home-based businesses.

Depending on your business model, you may need other forms of liability insurance. Product liability insurance protects you against claims involving items you sell that cause bodily harm. The service equivalent is professional liability insurance, also known as errors and omissions insurance, which protects you against claims of malpractice, errors or negligence.

Commercial Property Insurance

The business counterpart to home insurance, commercial property insurance, guards you against losses related to events such as fire, floods and crime. Commercial property insurance can cover a wide range of disasters, or it can be peril-specific. Remember to insure your company cars, too.

Home-Based Business Insurance

Some entrepreneurs who work from home may not realize their personal insurance does not cover their business. Specialized home-based business insurance can insure you against losses related to your work.

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