Insurance Matters

Determine how much, and what type, of coverage you need.
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If figuring out what insurance you need makes your head spin, calm down; chances are, you won't have to consider the whole menu. Most property and casualty companies now offer special small-business insurance policies.

A standard package policy combines liability; fire, wind and vehicle damage; burglary; and other common coverages. That's enough for most small stores and offices, such as an accounting firm or a gift store. Some common qualifiers for a package policy are that your business occupy less than 15,000 square feet and that the combined value of your office building, operation and inventory be less than $3 million.

Basic package policies typically cover buildings, machinery, equipment and furnishings. That should protect computers, phones, desks, inventory and the like against loss due to robbery and employee theft, in addition to the usual risks such as fire. A good policy pays full replacement cost on lost items.

A package policy also covers business interruption, and some even offer you liability shelter. You may also be covered against personal liability. To find out more about package policies, ask your insurance agent; then shop around and compare.

Excerpted from Start Your Own Business: The Only Start-Up Guide You'll Ever Need