Review of Carmen Nobel's Four Types of Insurance

I read this post at: http://www.thestreet.com/story/10698059/1/four-types-of-insurance-businesses-need.html?cm_ven=GOOGLEN Talking about the four types of insurance that every business owner needs. Basically, Carmen Nobel writes that the four types of insurance you need are:

Worker's Compensation
Home Business Insurance
Key Person Insurance
Product Liability Insurance

For Worker's Compensation Insurance, this is, of course, the law in California. However, in my work as a PEO (Professional Employer Organization) broker, I've come across businesses that were operating for more than a year and didn't have it. It's shocking but true. Businesses that hire mainly white collar employees don't really have to worry abut WC costs, because it is so minor. But get into a business like construction or manufacturing, and your WC costs go through the roof. Many times a PEO can assist you by actually charging you 20-30% less because they become the employer of record, and can negotiate the costs with the WC carrier. In some cases, they actually self insure.

Home Business Insurance: According to the blog post, this covers business property, lost documents and loss of income due to lost accounts receivables or emergency relocation. Sometimes this means upgrading a homeowners policy to include the home business, too. Since I've never heard of this type of insurance (just a "rider" on your home owners policy) I'm going to have to check with my insurance agent to find out more about it. I'll let you know what I find out.

Key Person Insurance, commonly known as "Key Man Insurance", is a life insurance policy in which the company is the beneficiary, so if the key person dies or is incapacitated for a long time, the company receives enough coverage to keep it afloat during the transition, whether that means finding and training a replacement or paying off investors before turning the company over to new owners. This kind of insurance is definitely worth looking into if you have a business with key employees.

Finally, Product Liability Insurance: This of course would only apply if you are manufacturing and selling a product. I liked her reference to the movie, The Jerk. "Anyone who doesn't understand the importance of product liability insurance need only watch the movie "The Jerk" -- a riches-to-rags story in which an entrepreneur loses all his money after his invention, a nose grip for eyeglasses, causes thousands of customers to go cross-eyed."

So if you run a business and you don't have any insurance, look into these four types. To read more of Carmen Nobel, go to: http://www.thestreet.com/author/1155442/CarmenNobel/all.html