Why should a business have insurance?

A business needs to have insurance, because the chance of suffering a loss begins with the first day of business. You may also find that other corporations you intend to do business with have minimum insurance requirements that you must meet before proceeding.

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Why do I need insurance if I don't have any major business assets?

Property is only one type of insurance and even if you own no assets you may need protection from liability, auto and workers compensation claims. In addition, your business is your source of income, so you may need protection from the potential loss of that income.

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Is insurance coverage different for different businesses?

Many insurance companies can provide you with a Risk Assessment to determine what insurance you need. A common package policy used by many small businesses is called the Business Owner's Policy (BOP). These can be underwritten individually and tailored to your specific business. It is best to speak with your insurance professional to advise you of the best policy (or policies) to protect you and your business.

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What if someone sues my business?

Liability insurance protects your business assets when the business is sued for something the business did (or failed to do) that contributed to injury or property damage to someone else. Liability coverage extends not only to paying damages but also to the attorneys' fees and other costs involved in defending against the lawsuit - whether valid or not. Ask your insurance professional to advise you of the best policy (or policies) to protect you and your business.

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I work out of my home. Will my homeowners insurance cover my business?

Most homeowners insurance policies cover business equipment and furniture in your home up to a certain maximum. Be sure to check your policy to see what your maximum is. If you conduct business in your home and someone connected to your business is injured at your home, in most cases, your homeowners policy will not cover any damages or court costs. Ask your insurance professional to advise you of the best policy (or policies) to protect you and your business.

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Materials, services or products offered by providers to SBDC clients are available as a resource for you to locate professionals who can assist you with business concerns. Making these sources available to you does not imply or constitute a recommendation or endorsement by the SBDC, but is only intended to be a convenience for you. You must perform your “due diligence” by interviewing the individuals or companies to determine if they meet your needs. If you do retain their services, be sure to obtain your agreement in writing: who is responsible for what; what work is to be performed; what is not included; what is the cost.

A partnership program of the U.S. Small Business Administration and the Bill Priest Campus of El Centro College, a division of the Dallas County Community College District. Funded in part through Cooperative Agreement # 9-603001-0046-22 with the U.S. Small Business Administration. All opinions, conclusions, or recommendations expressed are those of the authors and do not necessarily reflect the views of the SBA. It is the policy of the Dallas County Community College District and Collin College that all persons have equal opportunity and access to its educational programs, services, activities, and facilities without regard to race, religion, color, sex, age, national origin, or ancestry, marital status, parental status, sexual orientation, disability or status as a veteran.