Are You Ready for Mayhem?: Insurance Musts for Any Small Business
Unless you’ve been living under a rock since 2010, you should be well acquainted with “Mr. Mayhem” from the Allstate commercials, who warns you to get Allstate to be “better protected from mayhem like me.” The ads focus on how small, unplanned events, can have disastrous results if you’re not prepared for the unexpected.
It’s a point well made. From the day you start your small business, you’re at risk. One temporary closure or illness, or an unforeseen lawsuit could wipe your business out before it has a chance to even get off the ground. Consult with a good agent or broker to evaluate policies, and come to the meeting informed, so that you know you’re getting exactly what you need.
Here’s a starting list of “must-have” policies for the small screen printing business owner.
General & product liability insurance
Every business (even if home-based) needs to have liability insurance. Liability insurance provides both defense and damages if you, your employees or your products or services cause or are alleged to have caused Bodily Injury or Property Damage to a third-party.
If you own or even lease your space, property insurance is a must. This insurance covers equipment, signage, inventory and furniture in the event of a fire, storm or theft. As a side-note, if you’re operating out of your home, make sure your homeowner’s policy includes coverage for your equipment and inventory.
Business interruption insurance
Business interruption insurance covers lost income in the event of an unplanned shutdown or disaster—such as a fire in the building, or a street closure that keeps customers from accessing your business. If your business lives or dies on its ability to stay operational, it’s worth the investment.
Commercial auto insurance
Commercial auto insurance protects your company’s vehicles from damage, collisions and most importantly, third-party injury. If you do not have company vehicles, but employees drive their own cars on company business you should have non-owned auto liability to protect the company in case the employee does not have insurance or has inadequate coverage.
Worker’s compensation provides wage replacement, medical treatment, disability and death benefits to employees who are injured or become ill on the job. Plus, it keeps you from getting sued. If you have W2 employees, most states require this coverage, which can often be packaged in with your payroll services.
Health insurance is not only essential for you; it’s essential for your employees as well. 38% of all workers in the U.S. have no paid sick leave, meaning they usually come to work sick and stay sick longer, resulting in $160 billion dollars of lost productivity annually. An investment in paid sick leave and good health insurance for yourself and your employees is an investment in the long-term health of your business.
If you’re the owner and operator of your own business, disability insurance is more important than ever. It’s also an attractive benefit to offer your employees. Disability insurance replaces a percentage or all of your income in the event you are unable to perform the core responsibilities of your job. It’s an important benefit that comes at a marginal price.
Life insurance provides you with the peace of mind that your loved ones will be taken care of (and not burdened financially) in the event of your death. Term life insurance is relatively cheap and can be purchased in increments of your choice. A good benchmark is 7X your annual salary. You can also offer your employees the option to buy term life insurance at their own cost, as an additional benefit of working with your company.
One additional consideration for small business owners is purchasing a “Business Owner’s Policy” (BOP) that covers most types of insurance you might need—including liability, property business interruption, commercial vehicle, and theft. While you’ll likely need to look elsewhere for health, disability and life insurance—selecting a BOP policy can save you some administrative headaches.
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