INSURANCE

When you start a small business you will need to have insurance. You would be wise to shop around. Triple A rated carriers like Farmers Insurance, State Farm and All State are definitely places to get quotes from, but also be sure to check out your local independent insurance agents as well. When shopping for a quote there is some things you will need to know. For instance you SIC code and business category. If you are involved in more than one, it pays to look at both SIC codes to see which category is preferred by the agents underwriters. Some SIC codes many insurance companies will not even touch. For instance Car Washes, Amusement Parks, Aviation Businesses and security companies. But there are insurance companies who specialize in these areas. Perhaps you might wish to thumb through a recent trade journal to see which insurance companies are actively seeking clients in those categories. You will be glad you did; also do not forget to check online as well.

You will also need other data when shopping for quotes; you will be asked such things as: Address of Business Office; are you running your business out of a home or commercial location. If it is a commercial office; what is the square feet of business location, customer area. What is the age of the building; is it made of masonry or frame construction? How many floors? What types of business tenants occupy or share the building? The main concern of the underwriter's in some businesses is; where the supplies are stored? Especially if chemicals are used in your business. If you are a mobile service; are the chemicals stored on a vehicle? Where is the vehicle parked.

Insurance agents will also ask you how many years have you been in business? How much experience do you have; what are your projected and current gross annual receipts? How many full time and part time employees do you have? If you have mobile service vehicles you will need the full name, social security number and drivers license number for all employees who will be driving the vehicles. The more current our files, the happier the underwriters and the more information you bring with you when shopping for quotes the happier the agent. Happiness equates to a better deal, more shopping on the agents part and better relationships will all the parties concerned. Think on this when shopping for Business Insurance.

Insurance is an important part of any comprehensive financial plan. Insurance answers the question, "what if the unthinkable happens?" But too many people avoid it because they see the expense but not the benefit or they simply don't want to think about their own death or the death of a loved one. But insurance is a vital part of any financial plan and should be considered for everyone.

For most people, the best course of action when adding insurance to their portfolio is to ask these two questions:

What is a permanent expense in my life?

What is a temporary expense in my life?

The answer to these questions will help you determine what kind of insurance you need.

For example, funeral expenses are a permanent expense because they are always there. So you'll want to buy a small "Whole Life insurance policy" to cover funeral expenses. (It's called "whole life" because the policy is going to cover you for your whole life... a permanent insurance policy to solve a permanent expense). If you want to leave a legacy for a charitable organization, you may want to take out a whole life policy for that as well.

Your children's college education is a temporary expense, since (hopefully) they will stop going to college at some point, so if you decide to take out a policy to cover their education if you die, the term should end when the youngest child attends college. Another temporary expense is your mortgage. Match the term of your term policy to the time it will take you to pay off your mortgage.

Some other expenses to consider include

The care of an elderly parent is a temporary expense so it is best covered by temporary insurance.

The cost of a car is arguably a permanent expense since you will always have a car and car insurance and perhaps the necessity of buying a new one periodically.

The cost of a young widow to stay at home with the children to raise them is a temporary expense since the children will grow up and be able to support themselves at some point.

Many people avoid thinking about insurance. When they finally do decide to give it some thought, it is such a wide-open industry requiring specially licensed agents to help you that it is difficult to know where to begin. Before contacting an agent, sit down with your loved ones (the ones who will be directly affected by your unfortunate passing) and decide what permanent and what temporary expenses exist in your life.