We can all agree… your startup business will need insurance. The Insurance Agent is the next member of the Professional Advisory Team we will be discussing as part of the Starting a Business series.
To me, the CFP®, the CPA, and the attorney are the key players on your advisory team. But you still need other players on your team. So the next player you want to add to your advisory team is a good insurance agent, or insurer. In my "Dream Team" analogy, your insurance agent is like your power forward. He's blocking for you, running down the field creating the hole for you.
To determine the types of risks (legal, security, financial, health, employee, property, casualty) you and your business could face.
To determine the degree of risk you face in each.
To determine the amount of financial coverage you need if risks become reality.
When beginning a business, you should ask your insurance agent to identify the types of policies you will need (life, disability, health, cancer, accident, general liability, property, renter's, worker's compensation, umbrella policies, cybersecurity, etc.). Then, have the agent help you compare your different options. Typically, your insurer will help you choose among hundreds of policies available from numerous companies that provide insurance. Even though your agent is not a fiduciary, you should expect her to help you make the best choice based on the risks you face.
Typically, insurance agents are paid a commission by the companies they represent. I'm not going to beat around the bush about that. That's just the way their industry works. However, an insurance agent is still a vital member of your dream team.