How Do You Know how Much Liability Coverage?

[NewbieTotheGame]

Hi I have a potential client who is opening a small market/deli around 10 workers for them, I understand the WC part of the insurance they'll need but how do I figure out how much liability coverage they will need for their BOP/CPP? (im just lucky that ive been getting referrals from my other job, but I'm new to insurance/self employed)

Thanks! cause for homes it seems to be simpler for me because the value of the home kinda helps figure out their coverages needed but for this case I have no clue what to base it on.

 

[whatsa]

Where are you, and where is the store? Is the owner a large corporation, or a solo owner? What are the estimated revenues of the shop? In a large, urban / metro area, you may have to buy a larger limit than in a rural countryside. Having said that, I would never recommend less than $1MM and usually recommend much more

 

[NewbieTotheGame]

I am in Brooklyn,NY the owner is a corporation (not a large corp just a guy who incorporated cause he didnt want a sole prop) estimated revenues are 3,000,000 (based upon a similar shop)

 

[nyc2phi]

I would with either 1MM/2MM or 2MM/4MM.

You would be surpised how little a differnece it is in price to go up in liability coverage.

 

[whatsa]

I would with either 1MM/2MM or 2MM/4MM.

You would be surpised how little a differnece it is in price to go up in liability coverage.

I agree. Maybe even bump it up a bit.

 

[Milkman1265]

if he is doing 3MM in revenue, you should recommend 2/4MM then add a 2MM umbrella, its like 200 bucks to go from 1MM to 2MM and about 1000 for a 2MM umbrella

 

[b61mack]

I get a chuckle when I hear about small guys getting Inc'd, If they don't do the corp, meetings , with minutes.Or if they mix the funds with there own. A lawyer will pierce the corparate vail.Faster than a NewYork second.

 

[Milkman1265]

b61mack, im interested! explain!

Im 100% sure small business dont keep minutes or have their annual meetings. They get their corp books and tuck it away. But tell us how a lawyer might unveil the corporate shield!

 

[b61mack]

First a lawyer who is sueing you does, in discovery, To see if you mixed your funds with the corp, they ask for a copy of your corp, minutes. It is not a high hurdle to keep the corporate protection, but most small companies as you said, get the corp book, throw it in a drawer, and forget it. And as Mit said corporation are people too. And if you use the corp funds as a piggy bank, and you are not the sole owner, you could be charged with stealing from the corporation.