INSURANCE FOR PROFESSIONALS
Liability insurance can be broken down into three categories: general liability insurance, professional liability insurance, and workers compensation insurance. General liability insurance covers broad liability risks and is needed for businesses within all industries. The key components of this policy will protect a business from slip and fall claims, products completed claims, damage to rented premises, and more. Professional liability covers liability for specific professional licenses. This is a more specific type of liability that covers your business, and you as a professional, for claims that occur while you are working within your scope of practice. Workers compensation insurance will cover a business for injury or death of an employee. Every state has different laws regarding what size business needs to carry workers compensation insurance, but it is advisable that a company with any employees carry this valuable coverage.
Typically a professional will need a combination of all three of these liability insurance policies. General liability insurance to cover your business for general claims, professional liability insurance to cover you or your business for claims pertaining to your scope of practice, and workers compensation insurance to cover your business for claims from employees. Yet, there are hybrid policies and endorsement options for certain professions. It is important to have this discussion with your insurance adviser in order to understand what is needed, what is not needed, and what options you have.
Property insurance insurance covers a business’s property, or buildings and contents, including property in the care, custody, and control of the business. Property insurance covers the business’s real assets from a list of perils, unless the form is an ‘open peril’ form. There are about a half dozen different forms that each cover different perils, or different parts of a building, and its contents. Additionally, there are scheduled property policies for specific pieces of business property, policies that cover property the business keeps in its care, custody, and control, and policies for buildings in the midst of construction.
Property insurance is universal among us all because everyone needs a place for habitation and conducting business. Regardless of professional licensure, property insurance is something that all businesses need to consider. Simple policies that cover the contents of a medical office (i.e. computers, treatment tables, desks, copy machines) are just as important as the inland marine policy that covers the MRI machine, or a builder’s risk policy that covers the most recent real estate venture. Due to each professional’s unique circumstance it is highly advisable to have an insurance adviser review your options.
Life, Disability, & Health Insurance
Life insurance and disability insurance are financial tools used to protect the controlling interests of a business, or the businesses key employees. Both disability insurance and life insurance can be used to protect officers and shareholders from the untimely injury or death of a key person, or one of the controlling interests. These types of contracts are often described as key-person insurance, or key-man insurance, and buy-sell agreements. Life insurance policies can be written as term life insurance or permanent life insurance, depending on the purpose and function the policy is meant to serve. Disability insurance policies can be written with a variety options to manage expense, or provide a higher level of coverage that will provide coverage if you cannot perform your own occupation.
A recent and very dynamic use of these policies is the use of permanent life insurance as a type of pension. Due to the tax benefits that life insurance offers, this can be an option for small, medium, and large businesses. Depending on the business structure and the financial goals of the business owners, or key employees, this could be a strong option to consider. However, like many things in life it is not something that will work for everyone, and because of this we always recommend the businessowners accountant and attorney to be involved in the conversation.
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American Insurance Advisers
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