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1. What is seasonal business insurance?

Seasonal business insurance is beneficial for businesses who operate during certain times during the year. Business insurance will provide coverage to protect the business in the instance of a covered claim or loss. Seasonal business insurance can also provide coverage for a certain time-frame when the business is operating. I am seeing a trend of many seasonal businesses beginning to operate year-round with online sales as well.


2. What is the advantage to purchasing seasonal insurance rather than standard business coverage?

One of the primary differences of purchasing seasonal insurance vs. standard business policy is the time-frame to pay expenses. A standard plan will have payment options to pay throughout the year and verification at the end of the policy year.  These standard plans typically have a policy period which run on an annual basis.  A seasonal business policy will require the insurance costs to be paid in full by the end of season and the verification process at end of season. This may be beneficial to have all expenses paid and profits figured soon after the close of the business for the season.  Seasonal policies typically are in effect for the time period your seasonal business is running. 


3. Will seasonal insurance be impacted by certain liability exposures?

As with any insurance, liability can be the primary driver of costs. Depending on the type of business, the risk of harm to a person or property will determine rate. For example: a ski lodge may think they only need liability insurance during the ski season, but they may be sued during the off season if someone is hurt on the property even if the business is not open at the time of injury.


4. Does seasonal insurance cover my property year-round?

Seasonal insurance usually only covers a business during the operating season. If the client owns the property it would be best to have a standard policy which provides coverage year-round. Many standard business policies can have riders for peak season operations that expand coverage limits during the busiest times of the year.


5. I have vehicles and equipment that are used for eight months of the year, should I have coverage year-round?

Many insurance companies do understand that certain equipment is used only for certain seasons like a lawn-mowing businesses.  These businesses will only use their lawnmowers during summer months in Nebraska or a snow plowing businesses will only use their blades during winter months. Without getting into the weeds to much, the insurance company will rate equipment based on its value and use. And unfortunately, there is always the chance of having equipment stolen anytime during the year.  Long story short, you should maintain coverage year-round on your vehicles and equipment.  


6. Should I consider seasonal worker compensation?

Workers compensation covers the employee if they are injured on the job. By having workers compensation, it will limit the employer’s exposure to pay the employee for injury.  If you have any employees, it is always recommended to have a workers’ compensation policy.  In many cases, it is required by state law.


7. How will my business benefit from diversifying my insurance approach?

Insurance is one of those things that people hate to pay for but appreciate if anything goes wrong. Basically, insurance will help cover a loss that would be detrimental to business operations or the balance sheet. On the farm, if you lose two cows no big deal but if you lose 40 cows you are out thousands. Additionally, if your business has someone slip and fall you may have to pay them thousands to cover their medical expenses.  In severe cases, that number could increase to hundreds of thousands of dollars. Insurance will mitigate the risk of the business owner, protecting your livelihood and future. 


8. Final thoughts?

Business owners should review their insurance policy regularly and ask questions if anything is unclear. They should insure what their business cannot afford to lose, whether that is equipment or employees. Business owners are the most hardworking people in America. They must not forget to ensure their success by having the proper coverage for themselves. They are the drivers of their business; Income replacement and retirement plans must not be overlooked.

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The Firm makes no warranties or representation in consideration to the information provided above. All communication regarding this business must occur directly with The Firm Advisors, LLC. The Firm is not a real estate brokerage and does not sell real estate. The Firm solely advises on exit strategy.