Figuring out what type of insurance you need doesn’t have to be cumbersome. With a little time and energy, you can determine the basic insurance products your specific business needs. After you’ve completed these steps, be sure to discuss your business operations with your insurance representative. If you’re confused about any of the coverages that are needed, ask them to explain it — even if you need to ask for an explanation two or three times.
Think of everything that your business does. Write it down so that you can explain it to a total stranger. Your information could be as long as an entire page or as short as a paragraph. Length isn't important. The important thing is to be able to explain what type of business activity you are involved in.
If you own or lease property of any type, you will need property insurance coverages. If you are responsible for the property of others, you will need property insurance coverage.
If your business is highly dependent on computers, you should have special computer insurance coverage. If you sell products online, check your contracts to see if your web hosting company provides any protections against downtime for you.
If you do not have enough money to keep your business running for up to a year in case there is a major fire or your property is destroyed, you should have business income insurance. Think of this as a type of disability insurance, but for your business.
If you make or sell a product, you will need general liability insurance. If any customers come to your work site, you will need general liability insurance. If you think that your product or services could cause harm -- physical, mental or emotional -- you should have liability insurance to protect you against lawsuits.
If you own, rent or lease cars in your business name, you should have business auto liability insurance. If you have a truck and you use it in business, you should have it insured on a business auto insurance policy.
If you use your own car, or employees or other people run errands while driving their own cars, you should make sure that you have business auto liability insurance to cover these situations. This isn't always automatic. If you have to lease your car or have a leinholder, you should carry physical damage insurance on your business vehicles.
If you have any employees, you should carry workers compensation insurance. You may even want to carry this coverage on yourself and other officers of the company.
If your business has a website, you will need to make sure that your coverages extend to it , as well.