Needs To Know

Before choosing just any insurance package, analyze your needs.
Magazine Contributor
3 min read

This story appears in the January 1999 issue of Entrepreneur. Subscribe »

Despite the proliferation of "package policies," insurance is not a one-size-fits-all issue. You need to understand what your risks are, how much liability you can handle, and what you need to cover.

Some issues to consider:

  • Do you own or lease your property? As an owner, you're responsible for the building and its contents. As a renter, you need to cover your equipment, supplies and inventory.
  • Is your work performed solely in your office or plant , or do you routinely travel with equipment and inventory, or work off-site?
  • What is the likelihood that your product could cause injury or damage? To what degree?
  • Have you made provisions in case you suddenly die or become disabled?
  • Do you have employees who work from their own homes or take equipment or materials home with them?
  • Are there other businesses you depend on but have no financial interest or control in?
  • Does your company own vehicles, or do you use your personal car in the course of business?
  • What types of personal insurance, such as medical, disability and life, do your employees need?
  • How important is insurance to your ability to offer a competitive compensation and benefits package in order to attract and retain high-quality employees?

The Game Of Risk

Are you ready to play?

Big corporations have entire departments dedicated to risk management--a luxury most small companies can't afford. But that doesn't mean you can't take an objective look at your risks and work to reduce or eliminate them.

Begin by walking through your facility with a fresh, objective eye. Are hallways full of items that should be properly stored elsewhere? Are all chemicals--even ones like cleaning supplies or toner--stored safely? Are exits clearly marked? Do you have a security system, smoke alarms and sprinklers, and are they checked regularly? Is your parking lot clean, well-marked and well- lighted? Are workers following the appropriate safety procedures for their jobs?

Once you've done your best to reduce or eliminate risky situations, develop a disaster plan. Decide in advance how you'll communicate with employees, customers and vendors if your facility is either damaged to the point it is unusable or inaccessible for any reason. Duplicate critical data--particularly customer files and accounts receivable information--and store it off-site.

Check with your insurance agent or primary liability carrier for assistance in developing a risk assessment and management program.

Healthcare Benefits

In a recent study by Dun & Bradstreet, 39 percent of small-business owners reported providing health-care benefits to their employees. This is a 7 percent decline from 1996 numbers.

Woman business owners are the only group that increased health insurance offerings in 1997.

Next Step

  • Insurance Information Institute
    110 William St., New York, NY 10038
    (800) 331-9146 (publications),
  • Independent Insurance Agents of America
    127 S. Peyton St., Alexandria, VA 22314
    (800) 221-7917,

More from Entrepreneur

Our Franchise Advisors will guide you through the entire franchising process, for FREE!
  1. Book a one-on-one session with a Franchise Advisor
  2. Take a survey about your needs & goals
  3. Find your ideal franchise
  4. Learn about that franchise
  5. Meet the franchisor
  6. Receive the best business resources
Entrepreneur Insider members enjoy exclusive access to business resources for just $5/mo:
  • Premium articles, videos, and webinars
  • An ad-free experience
  • A weekly newsletter
  • Bonus: A FREE 1-year Entrepreneur magazine subscription delivered directly to you
Try a risk-free trial of Entrepreneur’s BIZ PLANNING PLUS powered by LivePlan for 60 days:
  • Get step-by-step guidance for writing your plan
  • Gain inspiration from 500+ sample plans
  • Utilize business and legal templates
  • And much more

Latest on Entrepreneur