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:

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.

Human Assets

People Count, Too

Can you think of any business that would be able to operate without at least one person at the helm? Probably not. The following types of insurance are available to cover losses involving bosses and/or workers:

Directors’ & Officers’ Liability When employees, shareholders, government agencies and others allege that the company has suffered financial losses due to company mismanagement, the response is often to sue directors and officers. This coverage protects both the company and individual executives.

Key Employee When one or two individuals are vital to a business’s success, it’s important to have key-employee insurance. The insurance protects the business in case of the death of the essential individual. 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 that have four or more employees, either full-time or part-time, 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.)

 

Intellectual Property

What You Can’t See

Your company’s intangible assets — its reputation, name recognition, know-how and/or creative ideas — have no physical existence, yet they have commercial value. They can be destroyed or stolen and thus they should be protected. Three types of intellectual property protection are available:

Patents A patent is a property right granted by the U.S. government to an inventor to exclude others from making, using, offering for sale or selling an invention throughout the U.S. or importing the invention into the U.S. for a limited time in exchange for public disclosure of the invention when the patent is granted.

Original machines, technical processes or methods, manufactured items and chemical compositions may be patented. “Utility patents,” for new inventions or functional improvements of existing inventions, remain in effect for 20 years; “design patents” are effective for 14 years.

Once the inventor discloses the invention publicly, he/she has a year to file for a patent with the U.S. Patent and Trademark Office (www.uspto.gov). You can apply for a patent online yourself; however, because of the complexities of filing patent applications, the USPTO recommends getting specialized legal help. Key elements of patent applications are “claims,” which describe the essential features that distinguish the invention.

Trademarks Broadly speaking, trademarks are words, symbols, names, Internet domain names, packaging and labeling that distinguish one business’s product from another’s. Trademarks may be registered through the U.S. Patent and Trademark Office or, for more limited state protection, with the Florida Department of State, Division of Corporations. Although registration provides greater protection, trademarks that are not registered still legally protect owners.

Copyrights Original writing, musical works, artistic designs and other works of expression are protected under federal copyright law, which gives the author exclusive rights to use the works. Copyright lasts 70 years after the author’s death.

Although an author’s copyright is automatic when a work is created, it’s a good idea to use a copyright notice because it informs the public and competitors that a work is protected. For copyright notices, simply place the word “copyright” or the symbol ©, the first year of publication and the name of the owner of the copyright on the work.

Copyright registration is voluntary; however, you have to register through the U.S. Copyright Office at the Library of Congress (www.copyright.gov) if you wish to bring a lawsuit for infringement.

It pays to be prepared.

Did you know that 40% of small businesses that are forced to close because of a disaster never re-open? Your best defense against being one of them is to be prepared.

Review your insurance policies regularly with your agent to be sure that you are adequately covered and understand your deductibles.

Diversify your customer base geographically so that if one area is severely impacted by a disaster, you can continue business as usual in another that is not.

Develop relationships with back-up suppliers before a disaster strikes so you can get up and running as soon as it is safe to do so.

Talk to your accountant, attorney, banker and other professional advisors so you know when and how to access your records — and your money.

Put together a fire- and water-proof “Records-to-Go” box containing important documents and necessary supplies for your business to continue operating after a disaster. Store it in a safe, off-site location and, if you must evacuate the area, be sure to bring it with you.