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Janice France-Petit: Protect assets with the proper insurance

Union Bank

Posted: November 26, 2010 9:09 p.m.
Updated: November 27, 2010 4:30 a.m.
 

As a business owner, it is important to protect your company and its assets from financial risks caused by unexpected events. Business insurance may help minimize some risks. 

California regulations mandate insurance requirements for businesses. California businesses with employees are required to have Workers’ Compensation and Unemployment Insurance. Additionally, the state requires that employees pay for State Disability Insurance, which employers must take as a payroll deduction. For a list of mandatory insurance requirements, go to www.business.gov/manage/business-insurance/employer-requirements.html.

It is recommended that business owners purchase enough insurance to cover the cost of replacing assets. Becoming an LLC or a corporation may provide some protection for personal assets but does not protect business assets. For this protection, business liability insurance is necessary.  Your financial lender, investors or clients, may require that your firm maintain certain types of insurance.

An attorney, insurance professional or financial advisor can help you determine which and how much of the following types of insurance you may need.

General liability
Covers accidents, injuries and negligence, including lawsuits and medical expenses.

Product liability
Companies that manufacture, distribute and sell products may be liable for their safety. This insurance protects against financial loss when products cause injury or harm.

Professional liability
Also known as Errors and Omissions Insurance, it protects businesses that provide services. The coverage protects against malpractice, errors, and negligence and covers many related defense costs including final judgment if necessary.

Commercial property
Covers everything related to the loss and damage of company property due to fire, smoke, wind, vandalism and other circumstances.  This insurance can provide income if a business is forced to suspend operations.

Umbrella
Provides additional liability coverage after the limits of the underlying policies are reached.

Key person
This type of life insurance covers a partner or key employee.
 
Home-based business
Homeowners’ Insurance does not generally cover home-based business losses. It may be wise to purchase general and professional liability policies.

The foregoing article is intended to provide general information about business insurance and is not considered financial or tax advice from Union Bank. Please consult your financial or tax adviser.    

Janice France-Pettit is a senior vice president and regional manager for Union Bank, overseeing the Simi Valley, Santa Clarita Valley, San Fernando Valley and Antelope Valley region. Visit www.unionbank.com for more information.
The foregoing article is intended to provide general information about corporate gift giving and is not considered financial or tax advice from Union Bank. Please consult your financial or tax advisor or the IRS. Ms. France-Pettit’s column represents her own views, and not necessarily those of The Signal.

Visit www.unionbank.com for more information.

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