Business Insurance Quotes FAQs

Q: What is risk analysis?

A: At least once a year, you should run a risk analysis on your business to determine the type and amount of insurance you should purchase. Setting aside mandatory insurance such as worker’s compensation and unemployment, you should consider the risk of property damage, employee theft, inventory loss, various liabilities, and the death of an owner. After assessing your risks, you should determine which risks you can eliminate by either installing security equipment, selling property, or updating older properties. Then you should determine which risks are important enough to be covered by insurance and find adequate coverage.

Q: I just started a small business. What type of insurance should I buy?

A: The best type of insurance for a small- or medium-sized business is the business owner’s policy (BOP). A BOP combines liability and property insurance, generally with various supplemental coverage including employee dishonesty or machinery breakdowns. Insurance companies may question you about your business and may place some restrictions on the policy itself. However, a BOP is a form of insurance that covers your basic needs as a business owner. It does not offer benefits to your employees, so you would have to actively seek out an insurance company that would provide you with group health insurance plans.

Q: How is worker’s compensation calculated?

A: Worker’s compensation is calculated by dividing your employees into categories and assigning a rating factor to each category. Then that rating factor is multiplied by the payroll amount for that category. The sum equals the net premium for worker’s compensation, upon which additional taxes and fees are added. Therefore, the more dangerous or risky a job category is, the more worker’s compensation you will pay for that category. And the more employees you have that fall under that category, the more you will pay towards worker’s compensation.

Q: What type of insurance do I need to run a home business?

A: Getting insured so that you can run a home business is relatively simple. First you need to check your homeowner’s policy; often times many of your materials will be covered in that policy. Talk with an agent and ask to add additional coverage to your existing plan. The additional coverage should include the equipment that you are using, such as the computer or a fax machine. The policy should cover liability insurance; malpractice insurance that protects you from losses due to a professional mistake, which is not always applicable; and disability insurance, which is not required by law but that offers more security. An agent will be able to provide you with practical advice and options for each situation.

Q: Do I need business interruption insurance?

A: Business interruption insurance should be thought of in a similar light to fire or theft insurance. Business interruption insurance allows a business compensation for lost time due to a disaster-related occurrence. If a business is not allowed to open for several days due to a storm or a fire, the damages to the building are far less severe then the cost of lost work. This insurance provides monetary compensation for the time that was lost. The amount of compensation id determined when the business chooses an insurance policy.