Frequently Asked Questions

Proper Insurance Coverage: A Sound Business Decision

Q. What are my alternatives in providing health care coverage to my employees?
A. With the changing face of the American workforce, employers have turned to more affordable plans for providing employees with needed coverage. Common selections for group health insurance include health maintenance organizations and preferred provider organizations. These selections provide a more affordable alternative to employers with a limited reduction in benefits. In selecting the appropriate health care package for your situation, take the time necessary to analyze your employees and consider their needs carefully.

Q. What kind of liability protection do I need for my business?
A. Most certified public accountants suggest purchasing replacement cost insurance. This type of coverage will replace your property at current prices, regardless of the amount originally paid. Although replacement insurance will cost more, you will be protected from inflation. In determining the amount of coverage your business requires you should consider the value of inventory, equipment, furniture, and fixtures. Losses due to earthquakes and floods are excluded from most property policies. Therefore, a separate policy called a Difference in Condition must be purchased if owners want to insure against these hazards.

Q. How can I protect my business from a fire or other interruption?
A. If a fire, flood or other unforeseen event discontinues your operations, business interruption insurance can assist you in meeting the ongoing costs of business while your company is unable to operate. Although your company is incapable of manufacturing its products or delivering its services, your business will continue to incur expenses. Expenses typically covered under the policy include payroll, rent, and other normal operating expenses. Some policies even provide your business with reimbursement for lost profits while you are unable to operate. As most policies cover specific expenses, it is critical the policy be structured to meet your individual needs.

Q. I've insured all my assets and for a potential disaster what else should I consider?
A. In today's environment, a business owner can be sued by virtually anyone their business comes into contact with ? employees, customers, delivery workers, and vendors. All of these groups have the ability to hold your business liable for damages caused by your company or employees. Liability claims can result from falls, auto accidents, defective products, or a variety of other causes. Liability insurance can protect your business from financial destruction, which may occur as a result of claims. Typically, policies state a dollar limit per occurrence and an aggregate dollar limit for the policy year.

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