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Consider your insurance needs during business formation

You have a lot to do as you start your new company here in Illinois. What type of entity should you form? Where will you conduct your business? Will you need employees? Another question that you may want to ask yourself during the business formation process is what types of insurance you need.

One type of insurance that you may need to consider is business interruption insurance. As the name implies, it covers certain costs and expenses you may have if your normal business operations are disrupted by some event. For instance, if some disaster occurs, this insurance may compensate you for the income you lose while you cannot be on the premises. It may also cover the operating expenses that you continue to incur despite not being able to use the property, such as for electricity.

You may want to consider a policy that also covers extra expenses you may incur as you attempt to continue business operations despite the interruption. Many insurance companies pay these expenses since it may reduce the amount of lost income and revenue they would otherwise be required to pay. You may need to conduct some research to determine how much coverage you would need in order to ensure that you get paid while you work to get your company back up and running at full capacity.

Answering these questions during the business formation phase may seem impossible. However, with the right help, you may be able to make reasonable estimates of how much business interruption insurance you may need, at least to start. Of course, this will not be the only insurance or issue you may have questions about during this time. This is where the experience and assistance of an Illinois business attorney could prove invaluable.

Source: iii.org, "Do I need business interruption insurance?", Accessed on May 12, 2018

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