Question: I'm starting my business and know I should obtain various types of insurance. Since my funds are limited, what do you recommend to start?
Answer: Virtually every business needs:
- Fire insurance extended for conditions including storms, explosions, smoke damage and other disasters
- Liability insurance for bodily injury occurring on your business's premises
- Theft insurance
If you're working at home, your homeowners policy doesn't cover these risks for your business activities, though endorsements and riders can sometimes be added to cover some risks.
Depending on your business, you may have some particular insurance needs. For example, if you're providing a professional service like coaching, you need professional liability insurance; if you're starting a food-related business, you need product liability coverage.
If you have an employee, you'll need workers' compensation insurance. And you need health insurance unless you're covered by an employed spouse's insurance or have a client who will make you a part-time employee so you're eligible to participate in the client's group plan.
You can research insurance policies and companies on websites like www.quickquote.com and www.quotesmith.com. However, you're apt to save time and trouble by using an insurance agent or broker who can advise you about types and amounts of coverage and develop a package that meets your needs.
Talk with two or three established agents and solicit bids. You may be able to find agents specializing in your particular type of business or industry.
Before actually buying insurance, check out the insurance company's financial ratings at www.ambest.com and www.weissratings.com, and be sure the company is regulated by the insurance commissioner in your state.