Protecting Your Business From Liability

Get the best coverage for unexpected emergencies

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lockcomputersecure_edited-1When Alaina Paul-Mensah decided to open her restaurant, Alaina’s Berries & Creole Cafe, she knew that her company needed insurance protection. What she didn’t realize was that there were several options available to her. “I really had to do my homework and shop around,” says the Sacramento, Calif.-based private chef. “One broker gave me a quote and tried to pressure me to sign, but I’m glad I waited, because I eventually found a better deal.”

Insurance experts say that Paul-Mensah is ahead of the curve because she realized early on how important insurance is to her company.

“Many small business owners don’t think about coverage until it’s too late,” says Hyacinth Tucker, owner of Tucker Insurance Agency in Crofton, Maryland. The need for an insurance claim could come from something as simple as a broken air conditioner or as devastating as a fire.

If you don’t have a policy in place, you can’t be helped, so take steps now to make sure your company is protected. Decide on a comprehensive policy, find the best price for it, and make ongoing insurance adjustments as your company grows.

Consider a business owner’s policy. Some forms of insurance cover bodily injury claims. Others cover property damage. The business owner’s policy covers both and more, Tucker says. “If something were to happen to your company because of hail, a windstorm, or fire, you’d still need to continue your business. You’d still be responsible for lines of credit, employee wages and benefits,” Tucker says. A business owner’s policy would replace loss of income so those bills could be paid. To have adequate coverage, Tucker recommends having insurance worth $1 million to $2 million.

The costs for these policies are determined in part by the risk factors for business. “The policy for a caterer (who could be sued for food poisoning) would probably cost more than the policy for a seamstress,” Tucker explains. She says that premiums might be as low as $250 a year for low-risk, inexpensive trades, and go up to a few thousand dollars per year for contractors or transportation companies.

Shop around. “There are a big differences in rates from one insurance company to another, so make a few phone calls and get different quotes before selecting one,” says Eric Huffman of Eric Huffman Insurance Inc., a State Farm Insurance company in Detroit, Michigan. “Not only get the rate quote, but also make the insurance companies write out what your coverage, deductibles, and contents would be. Then make apples-to-apples comparisons.”

Part of the policy cost will be based on the amount of inventory you have. When tallying up the value of these goods, be sure to consider seasonal fluctuations. “If you’re a florist, you might only have $10,000 worth of inventory in the fall, but around the holidays, your need for inventory coverage could increase to $20,000,” Tucker says.

Investigate other forms of insurance as your business grows. Once you have an adequate business owner’s insurance policy, consider

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  • I am a new start up business in Atlanta but with branches in London and Nigeria. We carry out door to door courier from the states to Africa and we are an IAC. I am finding it difficult getting insurance for the office which I currently rent, because of the nature of our business most insurance companies say they do not insure courier companies. So please any ideas and or recommendations will be highly appreciated.

  • Hello Ms. Margarette Burnette,

    Happy New Year! Many small business owners are downsizing and beginning to operate out of their homes in order to slash expenses. This is especially true for writers, public speakers, consultants, and graphic designers. By doing so, entrepreneurs should be aware that their current insurance company may raise the rates of their existing homeowners insurance policies.

    Are you aware of any insurance companies that specialize in offering “group/discount rates” to the aforementioned types of small business owners who choose to operate low risk businesses out of their primary places of residence?

    Thank you for the gift of your time. As a sign of respect, I tip my hat to you.


  • Good Morning business owners!! I am a insurance broker with a branch in the Middle East and in Texas and I specialize in risks in both regions. I would love to assist your new venture in any way. I look forward to speaking from you soon.

    Best regards,
    Ashley M. Hunter
    HM Risk Group
    +1 214 801 3166

  • It seems that recession results in proliferation of cost-per-performance services which minimize marketing costs and risks for businesses. For instance, nationwide publicity can be obtained on pay-for-results-only terms from (Publicity Guaranteed), online advertising can be obtained on pay-per-visitor terms from Google and Yahoo, cable TV offers revenue-sharing deals for infomercials and many services can be obtained for stock via Does anybody know companies which offer advertising in print media on similar terms?

  • Hello. I just graduated with my masters this summer.I am looking to start a tshirt printing business with my younger brother. Obviously to kick this up , I need funding. I told a fellow worker at my internship about the idea and he said that he would love to help with funding the project. As long as he gains a dollar for each sale we make. I was wondering if this is a fair proposition and how long must this 1 dollar share last?

    Thank you.

  • Aside from insurance, I also form a LLC for me and my partner based on the advise of my lawyer. I shoped around and used to help me get my LLC started.

  • Valerie

    I need assistance with finding some insurance as a Personal Chef. Does anyone have any Ideas?


  • I operate an online pet supplies store from my home with no inventory or foot traffic. Do I need to get a business liability insurance policy?



    Ferro Pet Supplies

  • Racquel from iDreamBrooklyn Studio

    Hi, i am in the process of establishing a mosaic art complany, and i will be running my business from my residence. I am fairly new in the game but i have reading material to guide me through. I am currently working on a business plan, but i am having trouble because i am more of an art geek than a business college graduate. I am eager to learn the ropes and i am patient on building my company.if there any one with some help advice i would appreciate it. also would i need liability insurace to sell mosaic art and other
    novelty products online .