Before heading into the world of insurance, I dreamed of becoming a carpenter. While still a student, I talked with one of the workmen finishing the apartment I lived in at the time.
“How much would it cost me to go into business as a carpenter?” I asked him.
“Well, you’ll need between $10,000 and $15,000 worth of tools, then…”
I didn’t hear the rest. My brain stopped absorbing anything after he said $15,000! I gave up on the idea and became an insurance broker instead.
Businesses face many challenges before even opening their doors. Purchasing equipment is only one of the many costs that await them. They have to draw up a budget forecast of future expenses and insurance must be part of it.
I could write several articles about all the protections available to different types of businesses, but a few types of coverage apply to a majority of companies.
In addition to general civil liability (the most important coverage for companies that I mentioned in the previous article), several other protections exist and should be added to any basic policy.
In fact, business insurance contracts never offer “all-inclusive” coverage. A company’s needs must be properly assessed and adequate coverage must be added to the policy in order to offer the best possible coverage.
Protection for the company’s physical assets is the most common request
It is important to insure not only buildings you own but also any physical changes you make to leased premises (dividing walls, floor coverings, suspended ceilings, etc.).
There is also your movable property. These assets either remain on company premises (offices, computers, samples, etc.) or move around regularly, like tools.
Finally, it is important to add “equipment breakdown” coverage to compensate exclusions for major events that could affect your property, such as electric surges or the explosion of a compressor, to name just a few.
But that’s not all…
Now that your property is insured and your civil liability coverage protects you in the event of a lawsuit, you should also protect your income.
If your business has a storefront, business interruption coverage will be a serious help if the company has to shut down for a few months after a major fire.
If instead your operations rely on equipment, like an excavation company would, additional fees will help you rent a replacement while you deal with a theft or vandalism.
Every business is unique. How it operates, but also its facilities, employees and customers. Because each company is different, insurers have developed products that are specific to each business. The cost varies from one client to another, depending on company operations and revenues. There are no shortcuts. Take the time to talk with your broker and make sure you’re properly insured.
I still sometimes think about my dream of becoming a carpenter. Then, I catch a glimpse of our strangely tilting flower box (the one I built last year) and I tell myself that, actually, becoming a broker was the right choice.