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Cover Every Emergency with Specialty Small Business Insurance

Choosing the right insurance is an important part of owning a business. If your company is up and running, you’ve probably already worked with an insurance agent to purchase the most common types of insurance policies you need, such as general liability, product liability, worker’s compensation, and other industry-specific insurances for vehicles and property. But is that everything you need? Many business owners never go beyond the legal requirements and bare necessities when they’re shopping for insurance, and this can be a mistake. If you plan for success, you could see your business grow, your number of employees increase, and your plan to keep everything running smoothly become even more important.

Here are some specialty insurances that you should consider when making sure you’re prepared for every obstacle that could come along.

1. Key Person Insurance

Key person insurance is used to offset the loss of a key founder or employee in your company. Typically, your policy will cover you, the business owner, as well as anyone else you employ who is vital to your operation including shareholders and managers. The more people you list on your policy, the more expensive it will be, so it’s important to limit it to whose death would cause a direct financial loss to the business. Or just cover yourself, to protect your family and your employees in the event of your own death by making sure the company can continue.

2. Critical Illness Insurance

In the past decade, businesses have experienced a quick introduction to critical illness insurance in Canada and the United States, partially because of the increase in heart disease, and partially because it fills a definite need. Critical illness insurance is becoming increasingly popular because it aims to keep you from going broke when you’re being treated for cancer, stroke, or other diseases. It’s very common for businesses to go under because the owner is unable to work or manage the business, as well as being overwhelmed with medical costs. The price may depend on your age and health, the same as many life insurance policies. This is why critical illness insurance is a smart idea for many companies.

3. Business Interruption Insurance

Instead of covering the loss of a person, business interruption insurance usually covers damage from a natural disaster. Recently, claims for this type of policy rose dramatically after Hurricane Sandy, when small business owners faced property damage that severely impacted their productivity, and some even lost power for weeks. This insurance can cover expenses you incur while you’re getting the business up and running again, as well as profits you would have made in that time period. The price of the policy is usually based on the particular risks of your business because of its location and the nature of your company. Some businesses can work better out of a temporary location than others.

4. Ordinary Payroll Insurance

Your business interruption or property insurance might include ordinary payroll, but since insurance companies are commonly trying to exclude it from those types of policies now, it’s worth noting the importance of making sure you have coverage. Ordinary payroll coverage will pay your employees’ wages, usually for up to three months, even if there is no work available or possible. If there’s a fire or damage to the building, and you are unable to operate during repairs, an insurance claim will pay your employees what they would have earned in the time it takes to get them back to work. Ensuring that your staff will return after an emergency is really important, because scrambling to find enough skilled workers after an interruption in business is never what you want to see happen.

Insuring your small business can be tricky because there is the possibility of over-insuring – taking on more burden in policy premiums than your business can realistically afford – but there is also a distinct possibility that you will be unprepared for an emergency. It’s important to talk to insurance agents or discuss policies with companies like Kanetix so you know exactly what you can afford and you can way the costs against the rewards. You never know when specialty insurance can save your business, as well as your finances. Think about you, your workers, and the nature of your company, and decide what your risks are. It can help you plan for the future, as well as face the unexpected.

About the Author: Amy Nielson is an avid blogger who writes often for insurance sites. You can follow her on Twitter @NielsonAmy.

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