Insurance-Why Spend the

Money?
An Excerpt from the Lesson
The Shnider Group LLC

A JOURNEY TO ACHIEVING YOUR GOALS

THE SHNIDER GROUP LLC

 Risk Management
This ebook is an excerpt from the Risk Management
Training Module and address the issues of protecting
against the loss of valuable assets-tangible and
intangible.  There will inevitably be a loss at some
time.  A business can be self-insured-assume the
entire risk of financial loss- or share the risk with
someone else such as an insurance underwriter
(company).  How much the business feels comfortable
bearing the financial responsibility or shifting some of
that responsibility to
others is a question for the owners to decide. 

What can they afford to lose and what they need to

protect financially?  Do not forget the technology risks
and cybersecurity perils.  These are the question and
some of the answers and explanations that are
in this lesson.  As always, one needs to consult with an
insurance representative that is knowledgeable within
their industry to get professional advice.  This
is no different, on a personal level, when one decides
to insure their house or auto or other personal
property, they decide how much of a monetary risk
they are willing to assume (the choice of how much of
a deductible or co-pay) and how much they are willing
to pay for someone else to bare the financial
responsibility (affects the premium cost).

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Many small business owners feel that paying
insurance premiums is a waste of money, especially if
they do not use it.  Well let’s hope that they do not
have to use it because if they do they probably have
experienced a hardship.  The purpose of insurance is
to pay someone to share the risk with us, against
perils.  This means that if something happens, within
or out of our control, someone is standing by to help
us financially to get through the issues.  It is important
that we develop a relationship with an insurance
agency that understands small business and not
just partner with any insurance agent. 
They have to understand your needs and be able to
forecast your needs for protection. So, let us look at
some of the types of insurance that small
businesses need to think about
 Liability Insurance

When an event happens, folks think that business

people are wealthy and have a lot of money
so let’s sue them as we are entitled to recover for
damages.  This protection includes issues that will
cover employees, advertising and personal injury,
professional liability and errors & omissions
insurance.  Other liabilities issues that should be
considered are product/service liability and premise
liability in the event of slip and fall issues. 

Remember if you have employees running errands for

you, and they cause any damage while performing
their duty, you may be exposed to liability damages. 
Small businesses work hard to get to where they are,
they certainly don’t want to lose it all in a lawsuit.  Find
a reliable and reputable partner to help you mitigate
your losses by sharing the risk with you.  Pay the
premiums.  Are they a waste of money?  Not if you
have to use their resources. But, let’s hope you don’t.
 Property Insurance
This includes business personal property (inventory,
furniture, equipment), real property (buildings, offices,
warehouses) and auto insurance (make sure your
insurance agent knows you use your auto for
business).  Also keep in touch with your agent at least
annually so they are updated on your inventory status
and your sales.  This is important because your
premiums may change based on your sales volume
and/or your change in inventory.

Health Insurance
If anyone has accessed the health care system today
they know how expensive it is to get services. 
Group coverage is more reasonable for companies
and may be tax deductible to the business-consult
with your tax advisor.  There are many types of
programs that can be very cost effective such as
Health Savings Accounts (HSA) and Health
Reimbursement Arrangements (HRA) that provide
efficient ways to provide health insurance coverage, at
a more efficient cost and also may be tax deductible to
the business and/or the individuals-consult your tax
advisor.

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 Disability Insurance

Think about where you would be if you became

disabled.  How will you and your family be able to fulfill
your financial commitments?  Think about short-term
and long-term types of policies and think about
whether you will pay for the premiums out of your pay
check or the business will pay for them.  This is a very
important issue from the stand point of whether or
not the disability income is taxable to you or tax free
to you-consult your tax advisor.

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 Additional Strategies to Mitigate Risk
Liability Insurance-In many cases this type of
insurance is purchased on an as needed basis, by type
of business and industry. It includes:
On Premise protection- In the event of an injury
on-site
Product liability-In the event a product may have
allegedly caused damage
Personal Injury-Protection against slander or liable
Advertising Injury-False or Malicious ads that result
in loss or damage
Employer liability-Coverage in the event employees
file lawsuit
Employee benefit liability-Protection for
misapplication of benefits
Employee practices liability-Coverage is company is
sued due to an employee’s allegedly wrong doing

Property Insurance

Business personal property-covers equipment,

supplies, etc.
Business real property-includes building
Business interruption-covers cost of not able to
conduct business due to a peril
Business Auto
Personal Auto

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Life Insurance-used for key man, business
continuation and to secure loans
Term
Whole Life
Annuity
Health Insurance-Can include
Traditional
Individual
Group
Alternative types of policies
-Health Savings Accounts (HSA)
-PPO (Preferred Provider Organization)
-HMO (Health Maintenance Organization)
Disability -Can be pre-tax or post-tax
Short-term
Long-term

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Meet The Shnider Group LLC
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nshnider@theshnider group.com; P: (614) 582-0208
Doris (Tussy) Shnider, BS in Ed, MA, MSW, PhD
tshnider@theshnidergroup.com; P: (614) 563-0107
 The Shnider Group LLC
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