If you are in business for yourself, you should have some kind of liability insurance. Depending on your business, having a surety or other bond will also protect you in the event a customer becomes unhappy and requests restitution. In some states, certain businesses are required to be bonded and insured. The process of obtaining the right business insurance and bond is a surprisingly simple one.
Instructions
1. Research your state requirements. Some businesses must purchase certain types of bonds and statutory amounts of liability insurance. Contact your secretary of state for a list of bonds and insurance products your company may be required to obtain.
2. Get insurance quotes. The best place to start in your search for business liability insurance is your car insurance company. Is it recommended to cover you and your salaried employees in case of accidents. Generally, you should purchase enough insurance to cover the entire net worth of your company. If you are unsure about how much insurance to purchase, ask your agent to analyze your company's financials and business plan. This will help her determine your needs. If you don't have an agent, there are many solid business insurance plans out there through a variety of companies (see Resources).
3. Obtain the correct bond. Generally speaking, a bond is a financial instrument that provides financial reparation in the event you are dishonest or violate terms of contracts you enter with your customers. Usually, businesses that perform services where customers pay in advance, such as remodeling or other services, where the money of others is used to do work. Generally, a bond will cost you about 2 to 3 percent of its face amount. A bond in the $25,000 to $50,000 is common for most small businesses. If your insurance agent cannot help you, there many other sources available (see Resources).
