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Insurance You (Probably) Don't Have But (Probably) Need

Date: February 22, 2010

Like experience, certain types of insurance may be something you don’t get until just after you need it. Running a business is complex and, unfortunately, it can make you vulnerable to claims on a number of fronts.

Though you may think you have adequate insurance, there may be some flanks you should consider protecting, according to Kelly Coley, a partner in family owned Coley and Lyles Insurance Agency of Gallatin, Tenn.

“Liability is a MUST, regardless of the business -- it should be a standard part of owning and operating a business,” she says. And you should check with your insurance agent on a regular basis -- at least when you renew your policy -- to make sure your exposure to risk hasn’t changed. For instance, a plumbing retail business owner who decides to start installation or repair work has added contracting-type exposure to the risks he had operating a store and would need to add proper liability to protect against claims.
  
Another type of liability business owners should consider is EPLI -- employment practices liability insurance. This provides protection with regard to hiring, firing and discrimination type actions. Standard business liability policies may not include this coverage.

If your business is in a flood plain, you may be mandated to have flood insurance. But water damage can occur in a variety of ways if you’re not in a flood plain -- a backed-up drain, a neighbor’s broken pipes, a leaky water heater, or a damaged roof, for instance. Check your property policy to determine what protection it offers. Depending on where you live, earthquake insurance may be a good option to explore, too.

Flood policies are usually mandated if you are in a flood plain. This is not an option if you are deemed to be in a flood plain and have a mortgage. Each state may vary on their policies.

An umbrella policy is always a good choice whether it is over personal policies or business policies, Coley says. This gives you an extra layer of protection in the event you saturate your underlying limits due to a claim. Costs are generally low for substantial coverage.

If you run a non-profit business or sit on the board of a company or organization, make sure a D & O (Directors and Officers) policy is in place. This type of policy provides coverage against lawsuits and claims of mismanagement.

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