Business Insurance (continues...)

If the organization owns or operates any motor vehicles, it must obtain an automobile liability policy. If there are any employees, worker's compensation insurance coverage is required by many states. Also, government agencies or contracts the organization is a party to (including leases) may stipulate that the organization maintain other types or amounts of insurance.

Other types of business insurance (not required by law or a third party) will usually be obtained as a business (balance of risk vs.. cost) decision on the part of the organization. For example, in the event that your employees handle funds belonging to your organization or those of a third party, a crime insurance policy may be appropriate.

An organization that has a board of directors should also consider directors' and officers' liability business insurance. This business insurance will protect officers and directors from liabilities which they may incur while serving the corporation. This coverage is important since it enables the a person to accept a position as an officer or director of a corporation without worrying about being sued and having to pay for legal defense costs out of his/her own pocket.

If the organization owns personal property, you may want to insure it to cover a loss in the event that such personal property is damaged or destroyed. If the organization owns real property, you should insure it against loss, and if the property is mortgaged, the mortgage company will require you to insure it against unforeseen loss.

Finally if you have employees, you may also want to consider offering certain benefits in the form of health or life insurance.

Insurance policies vary by coverage (what is covered, and for what types of losses), by the dollar limits on the policy (the maximum amount the insurance company will pay for any and all losses), and by the deductible (how much you must pay first before the insurance company will pay).