Owning your own small business can be exhilarating. It is the chance to be your own boss, and pursue a field you are passionate about. But without proper planning, a small business can also leave you in serious financial trouble.
Insurance can protect owners from having to pay things like legal judgments out of pocket, but many small business owners are not as covered as they think they are. The Chicago Tribune recently provided some advice for people looking to ensure their business is properly insured.
- If you operate your business out of your home, know what your homeowners or renter’s insurance covers. Often, it only covers up to $2,500 for damage to business property in the home.
- Be prepared for every conceivable eventuality, including the death of yourself or your partner. Have a plan in place if that happens, to avoid legal wrangling later. It may be a good idea to take out life insurance policies naming each other as beneficiaries, so that the surviving partner can afford to pay off outstanding loans.
- If you have people working for you, make sure you know whether or not they are “employees” as defined in Illinois law. This is especially important when it comes to figuring out whether you must carry workers’ compensation insurance.
- As far as group health insurance, the Small Business Health Options Program, or SHOP, provides options through online marketplaces. Businesses with fewer than 25 employees may qualify for special tax credits.
With proper planning and legal advice, you put your small business in position to be a big success.