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5 Step Venture eMentoring Program™

Session 5: Business Launch and Monitor Progress

Module 5a: Managing Business Risk

Managing risk can be one of the most important things you do to maintain the viability of your business. You've probably heard the horror stories about lawsuits that arise from careless hiring practices or major property expenses that result from a simple repair job left undone. Too often, major losses could have been avoided by simple attention to prevention early on. Purchasing business insurance can be a wise choice in preparing for the unexpected. There are many different types and many different prices. Investigate providers, coverage and costs to determine what makes the most sense for you and your operation. Follows is a summary of different types of insurance coverage. This summary was prepared by the US Small Business Administration.

Review each category carefully, and determine whether it represents issues that you need to be sensitive to. If so, you should talk to an insurance broker. There are many and so shop around. Check the choice that best represents your status. This will help you to quickly see which areas you need to further investigate.

Please fill in questions proceeded by a double asterisk and marked in red

General Liability
Many business owners buy general liability or umbrella liability insurance to cover legal hassles due to claims of negligence. These help protect against payments as the result of bodily injury or property damage, medical expenses, the cost of defending lawsuits, and settlement bonds or judgments required during an appeal procedure.

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Product Liability
Every product is capable of personal injury or property damage. Companies that manufacture, wholesale, distribute, and retail a product may be liable for its safety. Additionally, every service rendered may be capable of personal injury or property damage. Businesses are considered liable for negligence, breach of an express or implied warranty, defective products, and defective warnings or instructions.

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Home-Based Business Insurance
Contrary to popular belief, homeowners' insurance policies do not generally cover home-based business losses. Commonly needed insurance areas for home-based businesses include business property, professional liability, personal and advertising injury, loss of business data, crime and theft and disability.

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Internet Business Insurance
Web-based businesses may wish to look into specialized insurance that covers liability for damage done by hackers and viruses. In addition, e-insurance often covers specialized online activities, including lawsuits resulting from Meta tag abuse, banner advertising, or electronic copyright infringement.

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Worker's Compensation
Required in every state except Texas, worker's compensation insurance pays for employees' medical expenses and missed wages if injured while working. The amount of insurance employers must carry, rate of payment, and what types of employees must be carried varies depending on the state. In most cases, business owners, independent contractors, domestic employees in private homes, farm workers, and unpaid volunteers are exempt.

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Criminal Insurance
No matter how tight security is in your workplace, theft and malicious damage are always possibilities. While the dangers associated with hacking, vandalism, and general theft are obvious, employee embezzlement is more common than most business owners think. Criminal insurance and employee bonds can provide protection against losses in most criminal areas.

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Business Interruption Insurance
It is possible to acquire insurance that covers losses during natural disasters, fires, and other catastrophes that may cause the operation to shut down for a significant amount of time.

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Key Person Insurance
In addition to a business continuation plan that outlines how the company will maintain operations if a key person dies, falls ill, or leaves, some companies may wish to buy key person insurance. This type of coverage is usually life insurance that names the corporation as a beneficiary if an essential person dies or is disabled.

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Malpractice Insurance
Some licensed professionals need protection against payments as the result of bodily injury or property damage, medical expenses, the cost of defending lawsuits, investigations and settlements, and bonds or judgments required during an appeal procedure.

Addressed Does not apply Needs attention
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