One of the items that many entrepreneurs overlook when they get started is insurance. When you’re starting a business, it doesn’t seem important to worry overmuch about insurance. In fact, it might not even be on your radar. However, it’s important to be aware of some of the realities of insurance as an entrepreneur. Here are 5 insurance issues to watch out for:
1. Business Use of Your Home
We know that homeowners insurance is necessary if you want to protect what is likely your biggest asset. However, some homeowners policies don’t cover the business use of your home. If your homeowners policy does cover business use, your coverage might be capped at a rather low amount.
If you’re running your business out of your home (at least to start), you need to be aware of what’s really covered. Double-check your homeowners policy to make sure that your home office, and the business activities that take place in your home are properly covered by insurance. You might need to purchase additional coverage if your standard homeowners policy doesn’t do the job.
2. Health Coverage (Especially in the U.S.)
In the United States, health coverage is a big deal. Once you strike out on your own, you could find yourself without health insurance coverage. As an entrepreneur, you need to make sure that you aren’t putting your fledgling business at risk with big medical bills. While health insurance doesn’t completely protect against high bills, it can reduce some of the impact. However, since you are self-employed and not working for “the man,” you don’t have health benefits in the United States. You need to cover that lack on your own. The cost of health insurance is tax-deductible for entrepreneurs in the United States.
Even in Canada, you might still need private insurance, depending on your health care needs. Investigate your needs for health care, and make sure that you have the appropriate coverage, no matter where you live.
3. Liability Coverage
Depending on the nature of your business, liability coverage might be necessary. This includes the ability to cover costs if someone is injured on your business property, or in the course of your business operations. However, liability coverage isn’t just about physical injuries. Some professional entrepreneurs need to protect themselves from lawsuits. Doctors, financial planners, lawyers, and others find that liability coverage is important. There are many different types of liability coverage that can help you manage your reputation and protect your business. Consider protecting your business assets with liability coverage.
4. Vehicle Coverage
Some entrepreneurs have need of vehicles for their businesses. If you use cars, trucks, vans, or other vehicles as part of your business, you need to make sure that they are properly covered. Just as you might not be able to rely on your standard homeowners policy to cover business use, you might not be able to rely on your standard auto policy to cover activities related to your business.
Find out what needs to be done in order to ensure that your vehicles are properly covered. In many cases, it’s better to designate specific vehicles for business use so that you don’t mix business and personal. However, if that isn’t an option, speak to your insurance agent about possibilities. You need to make sure that your vehicles are properly covered. This also includes coverage for employees who might be driving your business vehicles. All of your drivers should be properly covered before you let them drive.
5. Life Insurance
Finally, make sure that you have adequate life insurance. You can get great rates if you opt to use online life insurance quotes. Many entrepreneurs don’t even think about life coverage. However, this is the coverage that matters to your family. If something happens to you, what will your family do financially? As your business expands, you need to double-check your coverage amount as well. Too many entrepreneurs start with a small amount of coverage, and then forget to increase the amount that they have later. The result is often that they don’t have coverage that reflects the growing financial success of the company. Remember that your family relies on you for their financial well-being. If something happens to you, they may not be able to manage. As your business grows, consider how much life insurance you need, and remember to update coverage as needed.