Annie owns a small flower shop with two delivery vans. Name and give a

QUESTION

Annie owns a small flower shop with two delivery vans. Name and give a brief description of the five types of insurance particularly recommended for small businesses like hers.

What will be an ideal response?

ANSWER

Answer: (1) Property insurance—protects buildings, cars, and their contents from fires, embezzlement, and other hazards. (2) Liability insurance—protects small business owners from losing personal property in the event of a lawsuit over negligence. (3) Auto insurance—covers injury or damage by or to employees traveling on company business. (4) Disability insurance—pays owner’s salary if owner is unable to work due to injury or illness for 6 to 12 months. (5) Professional liability insurance—protects against firm’s employees failing to perform their duties.
Explanation: These types of insurance coverage are particularly recommended for firms with few or no employees and organized as sole proprietorships or partnerships (which is 78 percent of small businesses).