If you're launching a new business, one of the things that you need to be attentive to is the importance of insurance protection for the business entity itself. This will include protection for your business, the products developed, and any liability incurred along the way. Here's what you need to know about this before you buy a policy.
How Is Your Business Registered?
In order to insure your company's financial interests, it must legitimately registered. That means you need to be sure that your articles of incorporation are properly filed. For example, just filing the articles with the Secretary of State doesn't make your company a legally incorporated entity. You'll have to have a complete incorporation package, including the charter, the bylaws, the board of directors appointments and even the stock issues. Every state has its own requirements, so work with a business lawyer to make sure yours is done correctly.
Who Owns The Business?
If you have gone into business with partners, you need to make sure that each of your roles is clearly defined in the contract agreement. Avoid going into business with anyone before you've worked out and signed a contract that illustrates each person's role, what they will receive for that work, and any expectations about the company secrets, trade information, and more. You should also detail exactly what happens if someone should decide to leave the company, including options for stock transfers and more. This information is important for the insurance company to know exactly what kind of risk they are taking on.
Who Owns Your Intellectual Property?
You might automatically assume that you own your intellectual property, but you could be surprised to find out that you actually don't. If you've worked with any independent contractors to do any work for your company, those contractors may actually have a legitimate claim on your business, at least for the things that they have created for you. Not to mention, if you were working for another employer when you developed your company and your employer had you sign an invention agreement, that employer may have a claim on the ideas you developed while under their employ.
All of these things will directly affect who has a vested interest in your business. Your business insurance agent will need to know the answers to these questions to help you draft a policy that will be relevant, comprehensive, and valuable to everyone with a claim on the company. Talk with your local business insurance specialist today to find out what your options are based on your business structure and financial position. Contact a company like The Blondin Agency Inc - Nationwide Insurance to get started.