Business Insurance - The Best Money You Can Spend
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THE INS AND OUTS OF INSURANCE
Insurance for your business can seem like an added expense that is not necessary when you’re just getting started with your business, but that could not be further from the truth. One of the main goals you should prioritize as a savvy business owner is protecting yourself and your family from potential liability. In some places, insurance is required for businesses. Regardless, I am a firm believer that all businesses (and individuals, honestly) should be insured to the maximum extent that is recommended, especially considering that, in most cases, you can purchase policies that cover your business for less than $100 a month.
Did you know that the United States is the most litigious society on the planet? As a matter of fact, Americans spend over 300 BILLION dollars (BILLION WITH A B!) on tort litigation annually. That is a lot of money on a lot of lawsuits, and lawsuits are expensive, if you have to defend yourself in a lawsuit, you can spend tens of thousands of dollars in legal fees that you may never get back. The unfortunate truth is that in the United States, anyone can sue you at any time for anything, and that is scary! You shouldn’t let this information scare you away from chasing your dreams, but you should take it to heart and purchase insurance. Much like automobile insurance, if you were to be sued while acting on behalf of your business, and the subject matter is covered in your policy, your insurance company will pay your legal fees and defend you in court. That is some real peace of mind.
As I discussed in my post “What Type of Business Structure is Best for a Travel Agent?” there are several ways to set your business up to protect yourself personally, but you need to be set up to protect your business assets as well. In some extreme cases, a corporation may not be enough to insulate you personally from liability, which is also an important factor to consider when determining whether or not to purchase an insurance policy. It would be devastating for your business and/or for your personal credit to have to pay out a major award on a lawsuit, you could even become personally bankrupt.
If, at this point, I have convinced you to at least look into insurance coverages, I have some valuable information on policies you may want to look into below. If it has not convinced you to look into insurance options, read those first three paragraphs again.
TYPES OF INSURANCE FOR A TRAVEL AGENT
GENERAL LIABILITY INSURANCE
NEXT General Liability Insurance
General Liability Insurance is available for individuals and businesses and provides financial protection for a variety of the most common types of liability for a small business. General liability insurance can cover personal injury claims, property damage claims, legal defense, advertising injury and sometimes other liabilities, depending on the policy. General Liability Insurance is an absolute, bare minimum, must have insurance.
WORKER’S COMPENSATION INSURANCE
NEXT Worker’s Compensation Insurance
If you have employees (literally any W2 employees), you need worker’s compensation insurance. Unfortunately enough, worker’s comp insurance is not required by all states and many employers skip this valuable protection. Should you have an employee be injured at work, this insurance will cover their injury, missed wages and ongoing costs. Medical bills are the number one cause of personal bankruptcies in the United States and can be devastating, you do not want to be responsible for paying an employee’s medical bills from an on the job injury.
ERRORS AND OMISSIONS INSURANCE
Errors and omissions insurance is important coverage for professionals who work with contracts and help to spend other people’s money. If you are a travel agent, that is you. E&O Insurance covers business mistakes, missed deadlines and accusations of negligence. It does not cover illegal activity though, so be sure your work is on the up and up!
CYBER SECURITY INSURANCE
If you do a lot of work online and use online systems to take payments from customers or make payments on behalf of customers, you could benefit from a Cyber Security Insurance Policy. These policies protect from all kinds of potential online liability such as viruses, ransomware, data breeches, wire fraud and even hardware failures damaged by malware and viruses. If someone hacks your computer and uses that to get your client’s information, you can rely on your Cyber Security Policy to take care of you.
WHAT OTHER INSURANCE MIGHT I NEED?
This is not an exhaustive list of the types of insurance that are available to you, you can also get policies to cover your business equipment, business real estate and commercial auto insurance. If you have a significant amount of business equipment, use your vehicle solely (or mostly) for business, advertise your business on your vehicle or your business rents/owns a physical building, you should look into other types of insurance to make sure you’re covered.
WHAT SHOULD I LOOK FOR IN A GOOD POLICY?
The “right” insurance policy is going to be different for everyone. Insurance companies evaluate individuals and companies for risk based on their specific circumstances. This means that an appropriate amount of coverage at a reasonable price point might be at a different agency than one that is recommended to you. You should do your research on your potential points of liability, which insurance types work best for your coverage and make sure that those policies cover your legal requirements for coverage in your area. Some other things to consider, in addition to monthly/annual premiums are the amount of coverage for the price, if the company offers consistent terms, the payout terms and the deductible cost.
WHAT IF INSURANCE IS COVERED BY MY AGENCY?
Many agencies provide some coverage for their agents as a courtesy or as required by law or their vendors. The coverage varies based on the agency. I recommend requesting specific documentation in the form of a certificate of insurance that specifies you/your business as being covered as well as details of the policy coverage and limits. You will also want clarification on who will pay the deductible if there is a claim. Lastly, compare that insurance to the coverage that you know your business needs and be sure to purchase your own insurance to fill the gaps.
DO YOU RECOMMEND A GOOD INSURANCE COMPANY?
I purchase my business insurance through NEXT. I found them through my bank and having researched policies and received quotes from other firms, the price, coverage and the convenience of NEXT were better for my business than any others. It is easy to sign up and you can get coverage in a few clicks of the mouse. The best part is, it is a one stop shop and is scalable for your business as you grow!
If you hear nothing else from me in this post, hear this, protect yourself and your family, be sure you are properly insured.