Special Forms of Business Insurance

Special forms of insurance are available to cover special needs. Among the most common of these special-purpose coverages are:

• Business interruption insurance, which will reimburse you for losses resulting from having to shut down your business due to events such as fires, earthquakes, floods, or other disasters. You'll have no cash coming in during a shutdown, but will likely have to cover payroll, taxes, and other ongoing expenses during that period. Business interruption insurance can fill this important need for you.
• Plate glass insurance will cover specifically named panes of large windows and signage, including emergency board-up services.
• Credit life is the name given to a class of insurance used by retailers selling larger ticket items to consumers on credit. It insures that you'll be paid should your customer die before a debt is paid off. This type of insurance is fondly referred to in the trade as "croak and choke" coverage. There is also a variety of commercial and installment credit coverages available when your business gets big enough to warrant this level of protection.
• Surety bonds exist in several forms. Performance bonds guarantee that you'll make good on your promises. Contractors use these extensively. Fidelity bonds vouch for your credit worthiness. You will need to give a lot of documentation to the carrier to prove your ability to meet the contracts you're bonding, and some carriers may require collateral. However, once your track record is established with an insurer, they will usually issue these bonds readily.

Tip There are many other types of special insurance from boiler and machinery coverage to rents, sprinkler, and transportation (by common carrier) hazard protection. Ask your insurance professional if any forms are offered that will cover your special situations as they arise.

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