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Protect It
Insurance • Intellectual Property • Disaster Preparedness
Business asset protection can take many forms depending on the nature and size of your business and whether the asset you are trying to protect is tangible, intangible or human. It sounds complicated until you realize that the whole issue can be handled through two primary vehicles: insurance and intellectual property laws.
Tangible Assets
What You Own
Your company’s tangible assets include property (cash, equipment, furnishings, tools and machinery) that is acquired for use in the operation of a business and is not for sale to customers. Insurance used to protect tangible assets includes:
Liability Coverage Protects a business from loss as a result of injuries, deaths or property damage caused by a business’s operations, employees or products. Two types:
“Premises and operations” coverage pays when a business is legally responsible for an injury claim, if, for example, someone slips and falls on company property.
“Products and completed operations” coverage, commonly called “product liability,” helps pay for monetary losses that result from injury or damage caused by a company’s product. One type of liability coverage required in Florida is commercial automobile insurance to cover vehicles owned by the company or personal vehicles operated by the company’s employees while on the job.
Property Insurance Protects the value of physical assets. “Replacement cost” coverage pays to replace or rebuild buildings and other property, as long as the property is insured for replacement value.
Windstorm Type of construction, size of structure, proximity to water and location determine the cost and availability of windstorm insurance through private insurers or through Citizens Property Insurance Corp., the state-created insurance provider.
Flood Property insurance does not cover damage from floodwaters, whether from rivers, bays or offshore water from the Gulf of Mexico or Atlantic Ocean, for example. Through the National Flood Insurance Program, managed by the federal government, a small business’s building and contents each can be insured for up to $500,000.
Business Interruption Insurance When a business must close because of an insured property loss, a business interruption policy, called “business income insurance,” pays ongoing expenses such as rent, utilities and some or all payroll expenses. “Extra expense insurance” reimburses for special expenses that help a business minimize losses by getting up and running quickly. For example, if a business can restart operations in a week, rather than a month, by paying a surcharge to ship replacement equipment by air express, the extra expense insurance would cover the air express charge. Since most business interruptions occur in the first 30 days after a disaster, it is important to get a policy that kicks in within a few days of the event.
Commercial Crime Covers losses caused by employee dishonesty; forgery or alteration; theft, disappearance and destruction; robbery and safe burglary; premises burglary; computer fraud; extortion; and premises theft and robbery.
Not sure how much insurance to buy? Visit sba.gov/content/buying-insurance for five handy tips.
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