With one of the most vibrant economies in the Detroit metro area, Southfield, MI is a great place to live in and to own a small business. Whether the business is related to the “Golden Triangle” that is headquarters for many Fortune 500 companies or the tech industry sprouting up around Lawrence Technological University, there are many opportunities for entrepreneurs in Southfield. The state of Michigan boasts 856,682 small businesses, employing 1.8 million people. The small business climate is strong and growing. But with these businesses came total insurance claims of $12.8 million paid out in recent years. Starting a business is difficult for many reasons, and one of them is understanding the insurance requirements.
Business insurance is vital in protecting businesses from unforeseen circumstances, and there are a lot of state laws and other requirements that come along with establishing a successful operation in Southfield. The best way to take care of this is to form a good relationship with your Independent Insurance Agent, who will get to know your business and find the best Southfield commercial insurance that fits your needs and your budget. Business insurance starts with general liability insurance. This covers injuries to other people and third-party property damage to individuals such as customers or delivery persons. It also covers the necessary legal defense if your business is sued over a covered incident.
The cost of incidents, no matter how small, is nearly unlimited because of potential medical costs. The Travelers Business Risk Summary found in recent years that 60 percent of small-business owners ranked medical cost inflation as their highest concern and over 30 percent said that they felt the least prepared to handle this concern. This is what general liability insurance covers for you. Businesses that provide professional services or manufactured goods also need professional or product liability insurance. This works in much the same way as general liability, but it is for incidents other than those on your premises.
According to a national study by the Insurance Information Institute, 71 percent of product liability awards and 53 percent of medical malpractice awards amounted to $1 million or more. You have to be protected against these liabilities even before you open your doors for the first time.
Business Interruption Insurance for Southfield Businesses
Many things might prevent your business from opening up on a given day. Power interruptions, because of a nasty winter storm, can last for days. If you have a fire or a water main break, you won’t be able to be back in business until the mess is cleaned up. This is why you need to have business interruption insurance. This coverage pays based on the revenue that you weren’t able to collect when closed, gleaned from the receipts from when you were open. It covers the ongoing costs as well, such as power and employee benefits, until you are back up and operating again. Business interruption insurance is vital for covering any unforeseen circumstances that may affect you for days on end.
Property Insurance for Southfield Businesses
Once you have the coverage that makes up the difference for when you are closed, you need to have insurance that covers the cost of putting everything back together. That is what property insurance is all about. It covers the cost of the physical space and equipment that you need to operate. There are many reasons your property might suffer damage. Fire and storms are the most common, but there are many unforeseen circumstances beyond your control that might keep you from operating.
Recently, there were 119 recognized natural disasters in the United States. Insurance covered only 61 percent of these losses, leaving $9.7 billion in damage, which businesses had to fund out of pocket. While you may be able to restore your business to operating capacity quickly after an incident, you also need the protection of good property insurance in case you are faced with a lengthy liability lawsuit.
Workers' Compensation for Southfield Businesses
Michigan law requires every business with employees to carry workers' compensation coverage, typically known as “workman’s comp.” This insurance pays out to an employee when the employee is injured on the job and cannot work for some time, regardless of whether that injury is from a one-time event or from repetitive stress.
- In recent years, workman’s comp paid out $1.27 for every $100 in wages.
- That comes to an average of $612 per employee.
Your assessment for workman’s comp is based on the employees you have and the type of work they do. If you have a long record of employee claims, the cost is based on your own history. New businesses are charged based on schedules that come from similar businesses in and around Southfield. There is a lot you can do to keep your workman’s comp costs down. Some carriers give you credit for ergonomic equipment and employee training, which reduce injuries on the job. This is one area where an Independent Agent can help you quite a lot, beyond just finding you the right policy.
Employee Coverage for Southfield Businesses
Health insurance is certainly expensive. In recent years, $1.1 billion was paid for employee health care coverage in Michigan. An average single person health plan cost employers $5,321 while a family policy ran $15,242. But it is only one of the kinds of coverage you may want to offer to your employees. Options include the following:
- Health plan insurance: This is required by law for companies with 50 or more employees, but many smaller businesses are opting to provide this coverage as a service for their loyal workers.
- Life insurance: In case something happens to your employee, you may want to cover them as well as protect the family.
- Disability insurance: Similar to life insurance, this pays out when an employee cannot work anymore for any reason.
Employee coverage is often a great way to reduce turnover among employees. Many Southfield businesses offer packages for their employees to keep the best ones and reward their loyal service. This cuts down on training costs and improves service.
Cyber Crime Insurance for Southfield Businesses
With all the kinds of insurance that your business needs, there are always a few liabilities that you may not even think of. One example is identity theft, a cyber crime, which has almost unlimited liability – limited only by your credit. It’s a serious and growing problem everywhere. There were 10,338 reported identity thefts recently in Michigan, the sixth highest in the nation. Policies are available to protect your business at affordable rates, assuming you take a few precautions of your own and work with your insurance carrier.
Business insurance that protects your growing Southfield company from all the liabilities and meets all the regulations is complicated. You need expert help to navigate it. Your Independent Agent can help you find the coverage you need to protect the business you work so hard to build at prices you can afford.
Talk to an agent today to develop a relationship that will protect you at the price you need for many years to come.