The Edmond Sun

September 28, 2012

Business insurance needs are varied

Matt Hopkins
The Edmond Sun

EDMOND — Q: I am opening a restaurant. I have dealt with the same insurance agent for years, but wonder whether I should get additional advice about the type of insurance I need for my business.

A: Most entrepreneurs I know are optimists. It is almost self-definitional. They go into business because they think they can make a go of it, not because they are intimidated by risk. Their experience and hope is that, with hard work, things tend to work out. But in business, risk is ever present. Even the best businesses run up against unforeseen problems, and every business person must be prepared to climb mountains that are not on his internal map.

Whether you are starting a new business, or own a business that has operated for years, it is critical to review all aspects of risk prevention. How do you protect your investment in the business in the event of an unforeseen loss such as a fire? How do you protect your business and personal assets from possible claims of others that the business has harmed them in some way?

True and full risk analysis is not possible in this format. There are simply too many considerations. What business entity should you set up to insulate your personal assets? How should you deal with partners? Should you have company procedures and employee handbooks? And yes, what types of insurance will protect you in the event of bumps — perhaps big bumps — in the road?

The insurance needs of a particular business are determined by numerous factors that are unique to that business. But in general, you should consider a variety of types of insurance. Property loss insurance will protect your investment in the assets of the business. You may need insurance to cover losses of income that result if your business temporarily closes due to a fire. You need liability insurance to protect your business and personal assets if someone is hurt by your operation. You may want life insurance on various owners to protect the business if a partner dies or becomes incapacitated.

Your insurance agent is a good place to start. But I would not stop there. You should consult an attorney to make sure you have purchased the right types of insurance. You also should have your attorney review the actual insurance policies to make sure they include the type of coverage you have been told they provide.

    

MATT HOPKINS is an attorney for Lester, Loving & Davies P.C. More information is available at lldlaw.com. Send questions to questions@

lldlaw.com.