TYPES OF INSURANCE
As a Small business owner, you have a lot on your plate and getting business insurance might fall to the bottom of your list. Don’t let this happen! It’s important to protect your business from claims and lawsuits that you can’t see coming.
You could be sued for just about anything, even if you haven’t made a mistake. If someone slips and falls in your business or a client thinks you didn’t do the job properly you could find yourself facing a claim or lawsuit. Business insurance can cover the cost, including the cost to defend yourself.
General Liability Insurance covers someone else’s claim of bodily injury, property damage or personal injury. This means if someone gets hurt at your place of business, or their property is damaged, you’re covered. You’re also covered for claims that you damaged someone’s reputation by slander or libel.
Professional Liability covers your professional services or advice. This is sometimes called errors and omissions insurance because it covers something you did that you shouldn’t have (an error) and something you should have done that you didn’t (an omission). Professional liability insurance protects for defense costs you even if the claim against you is found to be without merit.
Business Owners Policy covers if you have business equipment, like computers or tools. This is a combination policy which combines general liability with coverage for your business property.
Key Person Insurance insures your most valuable top executives/owners. If something were to happen to them the company would experience a tremendous loss. The company would need a cash infusion to find and train a replacement. There could be up to a year or more wait as the new employee gets “up to speed” and producing as well as the lost employee. The policy provides a “cushion” to cover the unavoidable losses and expense of replacing the “Key” employee.
BUY AND SELL AGREEMENT
A buy and sell agreement (or buy-sell agreement) is a legally binding contract that stipulates how a partner's share of a business may be reassigned if that partner dies or otherwise leaves the business. Most often, the buy and sell agreement stipulates that the available share be sold to the remaining partners or to the partnership.
Buy-sell agreements often use life insurance policies to fund the potential buyout in the event of a partner's death.