Insurance for homeowners, auto, and even health under the new laws are items that individuals recognize as necessary for everyday life. Insurance for business owners should be no different to help mitigate losses due to accident and other events. As small business owners there are several types of tax deductible insurance that should consider be for their business:
· General Liability Insurance: In the age of needing “Caution! Hot Coffee” on coffee cups even businesses that believe they have minimal liability exposure should consider this type of policy. This protects the business in the event that the business owner or employee causes property damage or injury to a third party.
· Property Insurance:In addition to owning buildings there are companies with very expensive equipment that the loss of could be costly. This insurance protects from damage in the event of theft, fire, or vandalism to name a few.
· Worker’s Compensation: This can vary state-to-state, but all states require business owners to have this if there are employees on payroll. Worker’s compensation protects business owners from being sued by injured employees and provides medical payments and compensation if injured.
· Professional Liability Insurance: Also known as errors and omissions insurance, this provides protection from improperly performing professional services. Typically owners of these policies include consultants, real estate agents, salons, lawyers, etc. General liability insurance does not provide this type of protection and must be purchased separately.
· Catastrophic Loss:Being near the coast here in Wilmington this is a policy that cannot be ignored. This insurance financially protects a business from closing due to loss from flood, hurricane, or other natural disaster.
· Life Insurance:So far all the above insurances discussed are fully tax deductible. However, life insurance can be tricky if set up incorrectly. This insurance is only deductible if it is “life insurance covering your officers and employees if (the business or business owner) is not directly or indirectly a beneficiary under the contract”. Make sure these policies are set up correctly to be deductible.
There are many more types of insurance available to businesses, but these are the more common types we come across. The key to deciding what types of insurance you need is to be educated on what options are available to businesses. While we are not experts on insurance we are happy to help guide you to someone who can answer what we do not know!