Do I Need Insurance for My Minnesota Business?
Before you begin your business, you should thoroughly investigate your business insurance needs. The insurance industry today can tailor an insurance package to meet the general and specialized needs of almost every business.
Because the insurance problems and needs of each business differ, no general insurance program can be outlined to fit every business. To be completely satisfactory, it should be tailored to fit the individual needs of each business. You should consult with an experienced insurance agent or broker.
Types Of Insurance
Business insurance is a matter of good business judgment. It is difficult to conceive of a sound business not carrying insurance custom-tailored to its individual needs. Among the basic kinds of coverage you should consider are:
Property Insurance
This protects the owner of the property (or the mortgagee) against loss caused by the actual destruction of a part or all of the property by fire, windstorm, explosion, falling aircraft, riot and other perils.
Business Interruption Insurance (and Other Time Element Coverages)
These protect a business against loss of earnings resulting from an interruption caused by damage to or destruction of the physical property. Business interruption insurance will pay you approximately what you normally would have earned. The premiums, especially when part of a complete insurance package, are low. There is also similar insurance which provides coverage if you are hospitalized and have to shut down business.
Liability Insurance (Including Business Automobile)
This protects a business against loss arising out of legal liability for death, injury or damage to the person or property of others caused by negligence. Included are obligations to pay medical, hospital, surgical and disability benefits to injured persons, and funeral and death benefits to dependents, beneficiaries or personal representatives of persons who are killed, irrespective of legal liability.
Bonds
Fidelity bonds guarantee against loss due to the dishonesty of employees. Surety bonds guarantee the performance of various types of obligations assumed by contract or imposed by law. Surety bonds are most often used in the construction industry and are often required on public construction projects.
Information on the Minnesota Bonding Program which provides individual fidelity bonds to employers for job applicants who may be denied coverage can be found earlier in this Guide in the section Business Licenses and Permits.
Workers’ Compensation Insurance
This provides for payment of compensation benefits, as established by state law, to injured employees of a business. See the section in this Guide on Workers‘ Compensation for additional information.
Group Insurance for Employees
Group life insurance and group health insurance provided as employee benefits must conform to standards established by state and federal statute. These requirements are described in greater detail in the section of this Guide on Employee Benefits.
Product Liability
This refers to insurance coverage for any product manufactured by the insured. Coverage applies to the product once it leaves the manufacturer’s hands and covers the manufacturer in case the ultimate user of the product sues for bodily injury or property damage.
Social Networking
Technology continues to change the landscape of potential employer liability. With the increasing popularity of online social networking websites, organizations should be aware of how employees use social networking technologies, especially in the workplace. Networking can be valuable, but employers must realize the potential risks and weigh the costs and benefits of allowing access to websites like Facebook, Myspace, Twitter, etc. in the workplace. For assistance in navigating any of these issues, contact you insurance agent or legal counsel.
CREDITS: This is an excerpt from A Guide to Starting a Business in Minnesota, provided by the Minnesota Department of Employment and Economic Development, Small Business Assistance Office, Twenty-eighth Edition, January 2010, written by Charles A. Schaffer, Madeline Harris, and Mark Simmer. Copies are available without charge from the Minnesota Department of Employment and Economic Development, Small Business Assistance Office.
