You have been running your new business for a period of time and you keep hearing that you might need insurance for your business. But everyone else seems to know what she needs, and has it all in place.  Nothing about the words makes any sense to you.

Personal Lines Insurance
So first let’s start with some terms, in plain English.  The insurance you are accustomed to seeing is the kind of policy that covers your car or your home.  Those policies generally are pre-written words in a policy format, and those policies may be provided to hundreds of homeowners or car owners.  Many agents in your area provide these policies.  This type of policy is generally called personal lines insurance or words to indicate that these policies cover personal possessions.

It is important in a legal document that the coverage of the policy is clearly defined.  Think about a situation where one person says “I thought it covered this…” and another person says, “I thought it covered something different.”  So a policy that covers personal possessions is very clear about the limits of the policy.

Business Insurance
Now, all of a sudden, you have a business that might or might not be located in your home.  You have a computer, software, a desk, phone, fax, copier, file cabinets, office supplies etc.  Do you need insurance coverage for your business possessions?  

In addition, you go to meetings at different business locations to talk with your prospects/clients.  And sometimes you bring your client’s materials home with you to work on them.  Do you need insurance to cover client materials?

You might have other business activities, such as delivering products that you own or those of your client; in your car, or an employee driving her own car.  Do you need insurance for off-premise exposure?   Maybe your business involves some food products and has food labeling and contains ingredients that most people can eat, but perhaps not all of them.  Do you need insurance to cover the product you are selling; product liability?  If you are coaching, providing advice in some area, then that too is a special type of business risk.  Do you need insurance to cover your potential errors; errors and omissions insurance?

The first place to ask about your business insurance needs is with your personal insurance agent.  Sometimes they have a standard policy that covers your needs, for example, a retail store or a barbershop.  A personal lines insurance agency may be in your phone book listed as State Farm or Allstate or American Family, or Farmers.  Or the name might be a person’s name.  The ad will often say Auto-Homeowners-Boat-Motorcycle-Renter-Life Insurance-Health Insurance-Business Insurance.

Commercial Insurance
Other coverage requires the advanced training of a commercial insurance agent.  They work for a commercial insurance agency; there is a big difference.  Commercial insurance agencies are used for insurance for all the large firms.  There are commercial insurance agencies in all medium and large cities.  These agencies are independent; they don’t have a single name of an insurance carrier in their name, as those you saw above. Commercial insurance agencies are usually licensed by more than one commercial insurance carrier, so the independent agency can usually obtain quotes from more than one carrier and provide you with choices.

These agents can provide insurance advice for your business, small, medium, or large.  They are trained to advise you regarding product liability insurance (for manufacturers or food production), or errors and omissions insurance (for professional services or consulting).

To find a commercial insurance agent, ask your CPA, your Attorney, or your Chamber of Commerce to give you the names of three commercial insurance agencies in your community.  These agents will meet with you for free, and talk about your business risks and how to protect them.  Or look on line for Pat McKay, McKay Insurance Agency, Inc. and send an email question.

I have met with hundreds of women entrepreneurs who talked with their personal lines agent and were told they did not need to worry.  Don’t stop with that advice.  Your business is important and is serious.  If you were in a court of law, you would be responsible for your business.  Keep asking questions until you are certain you understand your needs and made your own decisions on covering your risk.  Your business or commercial insurance agent will become one of your important advisors.
 

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