A weekly look at Wyoming business questions from the Wyoming Entrepreneur Network, a partnership of business assistance programs at the University of Wyoming.
By Mark Atkinson, MBA, Southwest Regional Director for Wyoming Entrepreneur
"Can you please give me an overview of business insurance? I'm starting a new business venture and insurance coverage is so confusing. And, I'm getting conflicting input from friends and family." Colbey, Evanston.
Business insurance (commercial insurance) is a protection no business should be without. Like the insurance for your home or car, it provides indemnification should you experience a sudden, unexpected loss.
There are a number of types of commercial insurance, including the following:
-- A basic policy, BOP, business owner's policy, described in more detail below.
-- E & O insurance (means errors and omissions). This protects you in case a professional error is made and suit is brought against you.
-- Executive Insurance, directors and officers insurance, which protects executives against charges of fraud and other misdoings. This is a common recruitment tool to attract talented executives; an entirely additional conversation.
-- Commercial Auto, which protects your company's vehicles. People often use their personal vehicles for business purposes. Without this coverage, which is very risky, a claim may be denied by the insurer when a personal vehicle is being used for business activities and a related claim is filed.
Let's look further into the basic components of a BOP, which may vary from insurer to insurer, but there are some common elements in most basic BOP insurance.
-- Property Coverage for a building you either rent or own.
-- Premises Liability Coverage protects you if someone is injured at your place of business.
-- Business Property Coverage (i.e. equipment and supplies).
-- Business Interruption Coverage, which pays you to keep operations going should a covered loss or peril shut you down temporarily.
-- Signage Coverage, which covers the signs at your business.
-- Inventory Coverage for theft or other covered losses.
-- Liability Coverage for Business Use of Employees' Cars.
-- Employee Dishonesty Coverage.
What a BOP does not cover is professional liability, auto insurance, workers' compensation or health and disability insurance -- separate coverage is needed for these risks. It's always in your best interest to consult a professional provider to discuss the specifics of your business and related insurance needs.
A blog version of this article and an opportunity to post comments is available at http://www.wyomingentrepreneur.typepad.com/blog/ .
For more information about the services of Wyoming Entrepreneur, or to ask a question, call 1-800-348-5194, e-mail wsbdc@uwyo.edu or write 1000 East University Avenue, Department 3922, Laramie, WY 82071-3922. Additional help is available on our website www.wyomingentrepreneur.biz.
The Wyoming Small Business Development Center (WSBDC) is a partnership of the U.S. Small Business Administration, the Wyoming Business Council and the University of Wyoming.
