Today is National Insurance Awareness Day. Why? No one really knows. It’s certainly not a Hallmark Holiday; and while one might think it originated with the Insurance industry and that they would embrace it wholeheartedly, there is a definite dearth of holiday-related events. It does have a Facebook page, but that page feels more co-opted than official, and it hasn’t been updated since 2013. And, according to an insurance industry marketing blog, the Day’s origin is Shrouded in Mystery.
However, should you need a precursory celebration as the July 4th weekend approaches, you could do worse than National Insurance Awareness day. A good place to begin the festivities is with a A Brief History of Insurance, which dates as far back as ancient Babylonian society (1894 BC).
Returning to the present day, now is the perfect time to assess whether your small business is adequately insured. If you are like many of your peers, the answer is either “no” or “I don’t know.” According to the 2015 DNA of an Entrepreneur Report, 1 out of 5 entrepreneurs don’t know if they’re insured against the most common small business risks (negligence, breach of duty of care, infringement of intellectual property rights), and just over half of the small business owners surveyed reported having Theft and Accidental Damage/loss insurance.
If your head just started spinning at all those types of insurance coverage, read 12 Insurance Terms All Small Business Owners Should Know for a great overview of everything insurance. But, before you start shopping for multiple policies, consider a Business Owners Policy (BOP). Ideal for small business owners just starting out, this single policy covers the basics in three major insurance categories:
- Property: Insures your office space, as well as business-owned property such as equipment and inventory.
- Liability:Insures against injuries sustained at your business location, or by using your products and services.
- Business Interruption: Insurance that replaces lost revenue in the event of natural or catastrophic disaster such as fire or wind damage. (Note: a recent survey found that two thirds of small businesses do not have business interruption insurance, even though about 25% of businesses do not reopen following a major disaster.)
You can typically customize a BOP to include additional coverage specific to your business operations, such as adding commercial vehicle insurance, or cyber insurance.
If you don’t have employees, a BOP is likely all your small business will need. However, as your small business grows so will your insurance requirements. Your best bet is to find a good Insurance Agent who can discuss your individual needs and help you put an insurance plan together that will meet your current needs and that will evolve with your business.
The following resources will help educate and prepare you for discussions with your agent:
- The Small Business Administration (SBA) Business Insurance Page
Learn about state government insurance requirements such as workers’ compensation insurance, unemployment insurance, disability insurance, and insurance for business-specific activities such as commercial auto insurance, as well as life, business interruption, fire, flood or other types of insurance that may be required by lenders or investors.
- The Small Business Owners Guide to Insurance
From the Insurance Information Institute, this comprehensive guide covers everything small business insurance from the basics (Property, Liability, Vehicle, Workers Comp insurance) to umbrella policies and how to find the right insurance agent.
- National Association of Insurance Commissioners Consumer Information Source
The NAIC’s Consumer Information Source (CIS) provides detailed reports about insurance companies including closed insurance complaints, licensing information and key financial data. If you’re considering purchasing new insurance, check-out the company here first to ensure that you are dealing with a reputable insurer who also provides great customer service.
If you prefer your insurance education in video format, watch the SCORE Webinar: Everything You Need to Know About Small Business Insurance. Provide your name, email address and zip code to access the 1-hour recorded webinar.
Finally, what National Insurance Awareness Day celebration would be complete without an annoying insurance salesman. For your viewing pleasure, all the Ned Ryerson clips from the Groundhog Day movie. Feel free to watch it twice.
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