A business insurance checklist.

• Author: Kronemyer, Bob

Being properly covered can be affordable.

Let's face it. No business relishes paying insurance premiums, especially firms that walk the financial tightrope. However, having insurance is part of the cost of doing business. So how can you determine if your business is adequately covered?

"The first thing they should do is seek wise counsel--if not someone within their own organization who has the insurance skills necessary, then an adviser or an agent," says Ken Andrew, a vice president at Citizens Insurance in Evansville. In most cases, Andrew recommends selecting an agent who has a successful track record of handling insurance for similar types of insureds.

"Just handing your policy to another agent and saying 'match this' is no way to work," concurs Marty Comstock, commercial operations manager for Gregory & Appel Inc. in Indianapolis, a full-line insurance agency. "You need to have someone come out and sit down with you. That's the only way you can determine if you're properly insured."

But unlike the typical homeowner, who can purchase a cut-and-dried packaged product, business insurance is much more customized. Depending on the industry, there could be automobile, general liability, product liability--even professional liability, covering such occupations as accountants, attorneys and nurses. In today's litigious society, no one can afford to go without insurance protection anymore.

Employment-practices liability is one area that businesses tend to give short shrift to. "These include exposures that arise out of discrimination and sexual harassment," explains Mike Wells, president of Wells & Co. Inc., an independent insurance broker in Indianapolis.

Then there's the cost of worker compensation insurance. Says Andrew, "In some construction accounts, worker compensation insurance could be by itself 5 percent to even 10 percent of payroll. For out-of-state exposures, it could even be worse than that." In contrast, such coverage for employers in the retail industry may be just a tiny fraction of overall sales and payroll.

In order to have peace of mind at night, insurance experts recommend paying particular attention to business-interruption insurance. "So often, people guess, whereas my approach is to take a copy of their financial statement and use a worksheet to develop a more realistic level of coverage," says Harold Everett, a managing partner with Insurance & Risk Management in Fort Wayne.

Business-interruption policies can range from...