Let’s Talk About Insurance Policies

By Jon L. Ten Haagen

asktheexpert@longislandergroup.com

Over the years I have seen so many people who are underinsured and even not insured at all even though they have a spouse and children to be considerate of and to protect. There are so many types of policies covering so many scenarios.

General Liability Insurance: Every business needs this coverage, even if you work out of your home.

Property Insurance: If you own your building or have business personal property, including office equipment, computers, inventory or tools, you should consider a policy to protect if you havefire, vandalism, theft, smoke or water damage, etc. Think about business interruption/loss of earning insurance. What happens if you can’t operate and therefore not bring in income?

Business Owner’s Policy (BOP): This is a package that covers all required coverage a business owner would need. A BOP will include business interruption insurance, property insurance, vehicle coverage, liability insurance and crime insurance. You can adjust the policy for what your company needs. Typically an owner will save money with a BOP because the bundle of services often costs less than the total cost of all the individual coverages.

Commercial Auto Insurance: This protects the company’s vehicles and can cover your work cars, SUVs, vans and trucks from damage and collision. Look into proper coverage if your employees drive their own cars for company business. You may get them covered under the BOP policy.

Workman’s Compensation: A policy that provides insurance to employees who are injured on the job. Policy can provide wage replacement and medical benefits. In exchange for this coverage the worker gives up their right to sue their employer for the incident. It is very important to have worker’s compensation insurance because it protects you and your company from legal complications. State laws vary, but all require you to have workers compensation if you have W2 employees. Penalties can be stiff.

Professional Liability Insurance: Also known as Errors and Omissions Insurance, this coverage is applicable for any professional firm including lawyers, accountants, consultants, notaries, real estate agents, insurance agents, hair salons, Certified Financial Planners (CFP) and technology providers. There are many other professions which should have this protection.

Directors and Officers Insurance: These policies protects officers and directors of a company against their actions that effect the profitability or operations of the company. Many nonprofit charity organizations should consider this type of policy.

Data Breach: If you store sensitive or non-public information about employ ees or clients on the computers, servers or in paper files they are responsible for the protection of this information.

Homeowner’s Insurance: This is one of the most important kinds of insurance you need. This policy can protect against damage to the home and against damage to items inside the home. This policy will also protect you from accidents that happen at home or may have occurred due to your own actions.

Insurance: This is so often overlooked, or not known by the renter. This is to protect against damages caused by persons who are renting your rooms or whole house. This covers physical property, the contents of the property and personal injury within the home.

Life Insurance: Protects an individual against death. You pay a premium in exchange for the payment of benefits to the beneficiary. This gives you peace of mind knowing that your loved ones are financially protected in the event of your death. This allows your family to continue on with their lives without having to drastically alter their lifestyle.

Personal Auto Insurance: This covers all road vehicles. These policies cover both physical damage and bodily injury because of a crash and any liability which might arise.

Personal Umbrella Insurance: This policy gives you additional coverage on top of the policies you already have. This insurance is an extension of already existing polices you have. These policies are usually sold in amounts of $1 million and comes into play only when the liability on your other policies is exhausted.

This covers some of the many types of insurance available. However, there is one policy every business should seriously consider: Key Person Insurance.

Often the most valuable assets a business has are the key people who contribute most to its success. How much time and money will it cost you to replace their knowledge and expertise? A key person insurance policy is a simple, efficient way to provide your business with the funds necessary to handle the loss and recruit and train a replacement.

How does a key person policy work? The business is the owner and beneficiary of the policy that insured the key employee. Upon the death of the key employee, the business received the proceeds of the policy (generally tax free), which gives them the ability to go out and search for a replacement employee. Many considerations go into the choice of a key person insurance policy.

For any decision on any type of insurance policy be it personal or business related, seek out the expertise of a true professional in the insurance field and be sure they can search for the proper policy for your need. Any agents are restricted by their companies to only offer policies that their company sells.