Why Insure Your Business.

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Your business represents a substantial investment of your ideas, time, and money (in addition to your sweat and elbow grease). Because your business faces a variety of risks and perils (e.g., property damage, theft, personal injury claims, and natural disasters), you'll want to protect your investment. You can do this with various types of business insurance. You may also want to attract and retain employees by providing insurance protection for them.

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Here are some reasons to insure your business.

To protect against risks and perils to property

Property and casualty insurance protects against the loss, damage, or theft of physical assets such as buildings, equipment, and business personal property. The loss or damage of business assets could result in an interruption of the business process and maybe even a complete shutdown. The right combination of insurance coverage can mean the difference between a temporary shutdown while you repair or replace the losses and the permanent closure of your business.

For example, assume that a hurricane or tornado damages your business's main building and contents. Without insurance coverage, you could be out of business and possibly even personally responsible for any outstanding loans, leases, or contracts. However, if you carried property and casualty insurance on the building, your business could recover the cost of repairing or rebuilding the facility. Insurance coverage on the business's equipment would also provide funds to repair or replace damaged machinery. And business interruption insurance coverage would reimburse the costs of operating from a temporary location.

To protect against liability claims

Through contact with the public and through personal injuries suffered on your business premises, your company could face liability claims and lawsuits. For example, retail outlets can be found liable if a customer is injured on the premises, and manufacturing firms can be found liable if a product is defective and injures someone. Service businesses can be found liable for providing improper care or advice.

Liability insurance can provide the funds to settle liability claims, sparing your business (or your own bank account) the expense. Liability coverage may also include legal representation in the event of a lawsuit.

To protect human assets

Your business can protect itself against the loss of human assets, such as the loss of services of key employees due to death or disability, through the use of company-owned life and disability insurance coverage on key personnel and co-owners. If a covered owner or employee dies or becomes disabled, the policy provides payments to cover the loss of income generated by that person. Funds provided by the policy can help your business continue operations and remain competitive while a replacement is found. Business owners can also use life or disability insurance to provide funds for the purchase of an owner's interest under a buy-sell agreement after the disability or death of the owner.

To attract and retain employees

Insurance can be used to help your business attract and retain quality employees. Group coverage such as life, health, disability, and long-term care insurance can be offered as part of your company's employee benefits package. In addition to salary, employees often seek benefits that will help them to improve their quality of life outside the workplace. By offering group insurance coverage as part of your company's benefits package, you may be able to attract and retain employees who might otherwise be hired by y

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