Insuring Tangible and Human Assets | Intellectual Property | Disaster Preparation | Cybersecurity
Considering the time and money you’ve expended to get your business off the ground, it makes sense to protect it. Business asset protection can take many forms depending on the nature and size of your business and the assets you wish to protect. It can be readily accomplished with insurance, intellectual property laws and cybersecurity measures.
Tangible Assets: Things You Own
Protecting Your Property
Your company’s tangible assets include property (cash, equipment, furnishings, tools and machinery) that is acquired for use in operating your business and is not for sale to customers. Insurance to protect these assets includes:
Liability Insurance 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, lakes or oceans. Through the federal government’s National Flood Insurance Program, a small business’s building and contents each can be insured for up to $500,000.
Business Interruption Insurance Pays ongoing expenses such as rent, utilities and some or all payroll expenses when a business must close because of an insured property loss. “Extra expense insurance” reimburses for special expenses and helps 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 covers the air express charge. Most business interruptions occur in the first 30 days after a disaster, so be sure to purchase 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? For five handy tips, visit sba.gov/content/buying-insurance
Human Assets: People You Employ
Protecting Your People
Can you think of any business that would be able to operate without someone at the helm? Probably not. The following insurance types are available to cover losses involving bosses and/or workers:
Directors and Officers Liability Protects both the company and individual executives in the event that employees, shareholders, government agencies and others sue directors and officers over financial losses due to alleged company mismanagement.
Key Employee Protects a business in the event of the death of an individual considered vital to the firm’s success. The company buys and pays for a key-employee policy — similar to a life insurance policy — on a specific individual, and the death benefit goes to the company rather than to the individual’s family.
Workers' Compensation Florida law requires employers with four or more full- or part-time employees to have workers’ compensation coverage for their employees. Sole proprietors and partners are not considered employees. Unless exempt, corporate officers are included in the definition of “employee.” (Employers in construction and agriculture are subject to different requirements.)