THB Schuler

Bob Schuler, a member of SCORE, is a guest columnist for The Herald Bulletin. Write to him c/o The Herald Bulletin, P.O. Box 1090, Anderson, IN 46015.

The Herald Bulletin

Insurance protects business assets from losses due to possible, but unpredictable events. Such losses could result from any number of incidents including fires, liability suits, and accidents. Insurance not only protects the immediate owner of business assets, it also secures them for creditors who would be unlikely to provide financial resources without the guarantee to collateral that insurance provides. However, insurance is becoming an ever-increasing source of concern. Its cost has risen steadily. Complaints are becoming louder and more frequent. According to the recently published National Small Business Poll, 64% of small business employers believe that the biggest problem with business insurance today is cost.

Business insurance is commonly sold to small-business owners in various packages or combinations of coverages. The NSB Poll broke the coverages out to reflect individual coverages.

a. Property Damage

Eighty-seven (87) percent of those who purchase insurance have coverage for property damage. If there is a fire or a hurricane or a fire or water damage, they are generally covered.

b. Product and Professional Liability

The second type of coverage examined was product or professional liability, including negligence, and errors and omissions. The propensity to have product or professional liability coverage is not related to firm size, nor to industry with the exception of financial and professional services.

c. Business Interruption

Business interruption insurance protects the owner against losses caused by an inability to conduct operations. In the event of a storm, for example, property and casualty insurance would pay for any physical and water damage while business interruption insurance would compensate the owner for losses incurred because the business could not operate until repairs were made.

d. Environmental Liability.

Comparatively few small businesses carry environmental liability insurance. Owners in the construction industry carried the coverage more frequently than did those in other major industries.

e. Employee Health

No other type of insurance has attracted more interest from small-business owners and policy-makers alike than has employee health. A number of recent studies and surveys have found premiums again increasing to double digit levels and the number of firms offering it declining.

Most small businesses carry employee health insurance. Almost every small business owner experienced premium increases last year. The repeated increases consistently doubling and tripling the cost of living portray the great difficulty that many small business owners face in paying for employee health insurance.

f. Slips and Falls (Premise Liability)

Protection against instances of premise liability is one of the most frequently purchased types of business insurance. Most businesses are covered.

g. Vehicle Collision and Liability

The use of vehicles for business purposes in small businesses is significant. This makes vehicle insurance, collision and liability, among the most pervasive types of insurance purchased among small employers. The cost of vehicle insurance is rising, too. However, the amount of increase appears smaller than for most other insurance types. Premiums remained stable to some with raises of 20%.

h. Employment-Related

Liability Concern among employers is rising over the ability of employees (more often, former employees) to sue them for alleged wrong. Wrongful termination, defamation, and discrimination (age, race, sex, etc.) are a few examples. Many employers take out insurance to protect themselves and their firms against such suits. However, a majority still does not do so.

i. Workers' Compensation

In Indiana, employers must carry workers' compensation insurance to protect their employees from the consequences of on-the-job injury or illness. Workers' compensation normally pays medical, rehabilitation, lost work-time costs or some fraction thereof, and benefits for permanent disability and death. As a portion of the premium pays for health care, as health care has increased, so has Workman’s Compensation.

If you have questions about business, contact the Chamber of Commerce for Anderson and Madison County at 642-0264 and ask for the forms necessary to obtain a free, confidential SCORE counseling. You can contact us on the web at and complete the forms found there.

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