Every design firm needs several different types of insurance to take care of employees and to protect the business itself. Let's look first at the needs of employees.
Health insurance
If you are a one-person company, you need to shop around for an individual health insurance policy like those available from Blue Cross. Do some research using an online database of medical insurance providers, such as:
http://www.insure.com
http://www.insurancetracker.com
You'll find that premiums for individual policies are much higher than premiums for group policies. If you're self-employed, look around for a group plan that you might be eligible to join. Many university alumni associations, as well as professional membership organizations like the Graphic Artists Guild, offer their members access to group health plans on a state-by-state basis. Many local chambers of commerce offer group health plans as well.
If you are a company with five or more employees, you may be able to establish a group health plan of your own. Apart from that, you may also want to consider:
- Life insurance
- Long-term disability
Basic business insurance
Now that the individuals in your firm are taken care of, what about the needs of the business itself? You need to protect the company against possible loss of critical tools and property as well as potential liability to others. Depending on the type of work that you do, some business insurance may be available to you through industry organizations, where similar businesses have grouped together to qualify for broader coverage at better rates. One such organization is the Printing Industries of America (PIA). PIA offers members access to group programs through local affiliates, state-by-state.
If you don't have access to an industry group, make an appointment with an independent insurance agent. To find an independent agent, visit Independent Insurance Agents.
For your basic needs, you may want a package policy that includes multiple types of business insurance within one document. Package deals are often cheaper than buying several individual policies. The most common type of package is called a business owner's policy (BOP). Each BOP contains three essential components:
- Basic business liability insurance.
This is often called general liability or casualty insurance. It provides basic coverage for personal accidents or bodily injury to third parties or damage to their property.
- Property insurance.
Property insurance provides you with coverage for business property that is damaged or destroyed by fire or lightning, as well as any expenses related to removing property if necessary to protect it from further damage. Many standard policies also cover "extended perils" such as windstorm, hail, explosion, riot and civil commotion, and damage caused by aircraft, automobiles or vandalism. Other important perils such as earthquake and flood damage are often not covered in standard policies.
- Business interruption.
This is often called business income insurance. If your business is severely damaged or destroyed, business interruption insurance provides indemnification for ongoing fixed expenses and for loss of normal profits.
In addition to the package policy, you may want to negotiate an umbrella policy. It would extend the limits of your coverage above the maximum amounts of the BOP. You would receive payments under the umbrella coverage only after the basic policy limits had been exceeded.
Additional business insurance
Separate from the basic protection in the BOP, you may need several additional types of coverage. Discuss these with your insurance agent:
- Workers compensation (required by law in most states)
- Business automobile coverage
- Valuable papers and records
- Fidelity insurance
- Key-person insurance
- Employment practices
- Directors' and officers' liability
Special issues for design firms
Typical BOP coverage excludes liability related to professional services. This type of exposure must be separately insured under a policy that is specific to the services that you are providing to your clients. Your needs might include:
- Professional malpractice
- Intellectual property
- Media liability
- Product liability
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