Do You Need Business Insurance for Your Internet Business?

Business insurance is something to consider when you start any
business because any type of business may need the protection
that insurance provides from time to time.

An internet business is a little different from a traditional
brick-and-mortar business because generally, customers don't
visit the place of business.

Also, most internet businesses are home-based, so homeowners'
insurance may cover basic business equipment such as a personal
computer and related computer equipment.

So, with an internet-based business, the primary concern is not
necessarily protection from loss of equipment and materials;
however, even an internet business may need some type of
insurance protection.

There are several types of business insurance that many
businesses simply can't do without. Some of the common types of
insurance for businesses include property insurance, liability
insurance, worker's compensation insurance, malpractice
insurance, and prepaid legal insurance.

Of course there are other types of insurance for business owners
and their employees such as health, dental, vision, and life
insurance. Learning about these different types of insurance and
analyzing your own situation will help you to determine what type
of business insurance you need for your internet business.

Property Insurance

Property insurance is sometimes required if you lease or finance
business property. If your internet-based business is in your
home, talk to your homeowners' insurance provider to find out if
your homeowners' policy covers your business equipment.

If it doesn't, and the value of your equipment is minimal, it may
not be in your best interest to purchase a policy specifically to
cover your business equipment and fixtures because you may end up
paying more in insurance premiums than what your business
equipment and fixtures are even worth.

On the other hand, if you have expensive business equipment in
your home office, you may need to insure it against damage or
loss.

Liability Insurance

Liability insurance is a type of business insurance that any
business may need, even an internet-based business. Liability can
arise from just about any type of business.

If you provide products or services to consumers, or even to
other businesses, there is always a potential for liability.
Weighing your risk is the best way to determine whether or not
you need liability insurance for your business.

Worker's Compensation Insurance

Worker's compensation insurance is required for most businesses
that have employees. However, the requirements may vary from
state to state. For instance, in some states, you are not
required by law to have worker's compensation insurance unless
you have three or more employees.

Worker's compensation insurance is the type of business insurance
that pays medical expenses and lost wages for employees who are
injured on the job. Whether or not it is required by law for your
situation, if you have any employees at all, purchasing worker's
compensation insurance will minimize your potential liability if
an employee is hurt on the job.

Malpractice Insurance

Malpractice insurance is necessary for businesses that provide
professional services such which require licensing. Professional
liability insurance is another term used for malpractice
insurance. It is necessary for businesses that provide services
such as counseling, medical services, architectural services and
so forth.

Prepaid Legal Insurance

Prepaid legal insurance has become quite popular in recent years.
It is an insurance policy that covers legal expenses such as
attorney fees. Many individuals and businesses alike find that
prepaid legal insurance is a safety net that is desirable because
if they need legal assistance, they don't have to worry about the
retainer fees and expensive bills from attorneys.

If you find that you frequently have to pay attorney fees for one
reason or another, prepaid legal insurance may be an option for
you to consider.

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Top 5 Mistakes People Make When Getting Business Insurance

This might come as a surprise to some, but getting the right insurance for your business might be one of the most important decisions you'll make as a business owner. The consequences of inadequate coverage, or no coverage, could be devastating. There is a whole world of things that can happen to you and your business. Not protecting yourself and your business with the right insurance could cost you in so many ways.

That's why engaging in a process of obtaining business insurance right for you and your company is so important. Do you know what general commercial liability insurance is? Well, if you don't, then it's just another reason why doing it right is so important. Not doing it right might cost you when you need help the most -- during crisis. It's why people get insurance. It's why smart business people get smart business insurance.

Doing it right essentially means avoiding some common mistakes made when trying to get the best insurance policy for your business. Knowing what some of these mistakes are, and avoiding them in the future, will help you in your quest to simply make the right business decision when it comes to insurance.

Top 5 Mistakes When Getting Business Insurance:

1. Discounting the importance of business insurance

Business people of all types, whether it be CEO's of large business conglomerates, or even someone just working out of their home office, have their own set of reasons for getting insurance specifically for their business. But not all business people necessarily think this way. Some think it might be too costly. Some think it might not be necessary . Some may even think that they're covered by other insurance policies that they have for their property or for themselves.

Not having the insurance specifically tailored for your business often comes as a result of simply not thinking that it's necessary. But it is. Take general commercial liability insurance, for example. This kind of insurance protects businesses from the costs of lawsuits resulting from basic damages done to people or property that have even the slightest contact with what you do. Not having this coverage when someone decides to throw a lawsuit at you, even if frivolous, could cost you in terms of money and reputation.

2. Not knowing the basic issues

It's nice to think that insurance is just insurance, but it isn't. Would you get car insurance for you house? Would you get life insurance for your healthcare? Of course you wouldn't.

Yes, some of the issues involved in business insurance are similar to other forms of insurance. A good policy will, for example, protect your assets in case they get stolen. It will also protect you if bad weather destroys your business property. These are straightforward insurance issues for your business. But don't be fooled into believing that they're the only insurance issues for your business.

For example, take general commercial liability insurance. Some business owners might not even know what liability insurance actually is. It's the insurance that protects you from the financial costs resulting from a lawsuit from somebody who claims they or their property has been hurt or injured as a result of the way your business conducted itself. General commercial liability insurance is the kind of insurance those companies engaging in commercial activities get to protect themselves because people hurt themselves on their premises or one of their products did damage to someone's property. Being knowledgeable about these kinds of things will most certainly help you get the right insurance.

3. Not getting insurance early enough

There are two things that can happen to you if you don't get insurance for your business early enough. The obvious one is that you'll need it before you get it, and you'll be stuck with paying for the damages from a storm or a lawsuit yourself. The other thing that can happen is that you will not have a budget for your start-up for the proper insurance, so you'll get stuck with inadequate coverage. That's the last thing you want to happen. Therefore, to avoid it, thinking about insurance as early as possible, even at the business plan stage, will help you create the budget you need to get you adequately covered for all future circumstances.

4. Getting the wrong kind of insurance provider

Perhaps the most tempting option for someone seeking business insurance is to get it through insurance companies they're already doing business with. So, for example, you like how your house is covered, and who's covering it, so you'll seek to extend that coverage to your business, too.

The reason this is inadvisable, or should at least be looked at very carefully, is that your property insurance provider might simply not have the kind of experience with the kind of insurance you need for your business.

For example, if general commercial liability is what your particular business is in need of, even if a provider carries that kind of insurance, they may simply not have enough developed expertise to know what's right for your particular needs. Ideally, only those companies and agents who have dealt with your kind of business before can help your kind of business get you adequately covered for your particular situation.

5. Getting the wrong kind of coverage

Following from the risk of getting the wrong insurance provider, a mistake to avoid is getting the wrong kind of coverage. Ultimately, you're the person in charge of making the right business decisions for your company. You're the best person suited to look out for your own interests. No one else is. That's why it's incumbent upon you to make sure you've got the right coverage for you and your situation.

As much of the above already suggests, delegating these decisions is important. Yet, in the end, it's you who has to decide if you have the right kind of coverage for your business. After going through the entire process, collecting all the information, and talking to the right people, it's you who makes the decision. Make sure it's the right one for your business and where you want to take it.

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