Our office flooded…in the middle of tax season…

Insurance is one of those things you don’t realize you need it, till you need it. Case in point, February 2021.  The year of the big winter freeze in Texas. To say we weren’t prepared was an understatement!  What a nightmare! We were fortunate that we had a generator for our home, so we didn’t have any major issues there. But….our office was a different story…we lived @ 20 minutes from our office and were not able to check on it till 3 days into the freeze. And this is what we discovered as a result of busted pipes….

In the middle of tax season…there was 6 inches of standing water too.

When I called about our insurance, I’ll be honest, I wasn’t sure what kind of coverage we had. But, thank goodness, we had amazing coverage! If I correctly remember, our total out of pocket was $1000. Our insurance even covered the cost of relocating during the 5 ½ months we were displaced plus lost time while we moved.

This whole experience changed my perspective on insurance. I knew it was important, but till this point, outside of medical insurance, I didn’t realize how important it is for a business owner.  So, I’d like to share an overview of what business owners need to know about insurance for their business. You need to be prepared for unexpected events that could potentially threaten your ability to operate. Some potential hazards you may face are floods, fire, lawsuits and even the sudden death of a key employee. I’ve provided a summary of the different types to look into.  If you need referrals for any of these types, let me know, as I “know people” 😊

Overview of business insurance

Property Insurance

Regardless if you lease or own, this basic insurance financially protects the physical assets of your business, such as land, buildings, inventory, furniture, documents, machinery, and similar items. Coverage can vary widely, so be sure you know what is — and what is not — covered by your policy. Also, make certain that your coverage is for replacement cost rather than original cost.

General Liability Insurance

General liability insurance is a must. We live in a very lawsuit-happy society. It protects your business assets in case of a lawsuit for something your business did (or didn’t do) that caused injury or property damage. Liability insurance covers such claims as bodily injury, property damage, personal injury, and damage from slander or false advertising.

Umbrella Insurance

Umbrella insurance is intended to protect a business from a major catastrophe or lawsuit. Typically, umbrella insurance steps in and provides the difference between your underlying general liability coverage and the actual cost of damages resulting from a lawsuit or disaster. You’ll find the cost is pretty reasonable.

Business Interruption Insurance

This type of insurance reimburses you for the loss of income resulting from an insured catastrophic event, such as a fire, flood, or other weather events. The policy covers the profits you would have earned if no interruption had occurred. And it pays for expenses that you continue to incur even though your business is not operating normally, such as debt payments, taxes, and salaries. This was a huge blessing when our office was destroyed from the freeze.

Key Person Insurance

You’ll need key person life insurance to protect your business in case you, a partner, or other key employee dies. If you operate your business with multiple partners, you should consider using life insurance to fund a buy-sell agreement. Disability insurance is also a must for you and your key people. I’ve heard horror stories with situations where this was missing.

Errors and Omissions (Professional Liability) Insurance

If you are in the business of giving advice, making educated recommendations, designing solutions, or representing the needs of others, you may want to consider errors and omissions insurance. This type of coverage protects you against claims that something you did on a client’s behalf was incomplete or inadequate, cost your client money, or caused harm in some way.  If you have a membership in a professional organization related to your profession, check with them first to see what they have to offer, as they will have the best idea of the specifics of your particular industry

Errors and omission insurance may be appropriate if you run a consulting business, design software or websites, sell real estate or insurance, operate a career placement business, etc.

Don’t be afraid to shop around, but also remember the cheapest isn’t always the best. Ask friends or business colleagues for referrals as well.