Does an S Corporation need insurance?

There two important facts that you, as a business owner, need to consider when doing business in the U.S. are:

• Ours is a litigious society
  
• During the course of doing business, something bad is going to happen sooner or later
  

The protections that you get from choosing to structure your business as an S corporation will typically only protect your personal property from lawsuits, and even that protection can be limited in nature.

In some instances, you may be legally required to buy certain types of business insurance such as workers’ compensation, unemployment, and disability insurance.

However, these government-mandated types of insurance don’t cover lawsuits. So, you need insurance to ensure that both your personal assets and your business assets are fully protected from an unexpected catastrophe. In many cases, clients will require evidence that you have a particular type of business insurance or will require a specific coverage amount in the contract that they have with your business.

But, depending on the type of industry you’re in, what kind of business insurance do you need?

Let’s talk E & O

There are four types of insurance coverage that you want to consider for S corps:

• General liability insurance — offers protection for you, your business, and your employees from any damages incurred as the result of bodily injury, property damage, medical expenses, libel, slander, the cost of defending lawsuits, settlement bonds, or judgments.
• Property insurance — protects your assets and the equipment, fixtures, and furniture; often rolled into your general liability insurance
  
• Professional liability insurance — also known as errors and omissions insurance; protects against errors, malpractice, and negligence in the provision of services to customers.
  
• Product insurance — protects businesses that manufacture, distribute, and retail products against any financial loss incurred as a result of a defective product that causes harm or injury.
  

Getting the right insurance for S corps can be confusing.  But, enlisting the services of a good insurance broker can really help simplify the process for you because your broker can put together a package that is tailored for the unique needs of your business.

Speaking to an expert

Daniel Fraisse, independent business insurance broker, has been serving clients in the greater Los Angeles area for decades. Over the years, he has developed long-standing relationships with most of the major insurance companies and, among his clients who are business owners, he has developed a reputation for being hard-working as well as dedicated to getting them the best possible deals on business insurance.

From S-Corp CEO’s to home business owners, Dan will determine the type of coverage that your business needs, will then do all of the legwork, looking at all possible insurance options, and will ultimately find the best coverage for your specific needs.

Call our office to schedule an appointment.