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Economic DevelopmentHow To Start A Business in Fayetteville
Fayetteville Chamber of Commerce
Starting a Business in Fayetteville, Arkansas
Introduction
a) City of Fayetteville
Fayetteville is a fun and unique mix of cool college town, thriving business community, outdoor-lovers mecca and cultural/arts center. We’ve been recognized by Forbes magazine as one of the top five smaller towns to live and work in the country and everyone knows we’re the only place where the Razorbacks run wild.
The beautiful and historic city of Fayetteville is the center of everything that happens in Northwest Arkansas. Surrounded by the Ozark Mountains, natural beauty is something you come to expect when you’re here. Fayetteville offers the small-town feel that Arkansas is known for, while always having something exciting going on. Fayetteville is located in Northwest Arkansas, only 25 miles from Missouri and 20 miles from Oklahoma and enjoys 218 days of sunshine per year.
Latest Recognitions
Top 100 Leading Locations for 2011 - Area Development magazine
#4 Best Places for Business and Careers for 2009 - Forbes
#7 Best Places to Live, Work and Play for 2008 - Kiplinger
#7 Top College Sports Towns for 2010 - Forbes
Best Small Cities for Startups and Best City in Arkansas for 2009 - Business Week
b) How to Use This Handbook?
This booklet is written for one purpose and one purpose only: to provide you with a step-by-step way to open your business. We have divided this booklet into six main steps that will help you start your business.
Step One introduces the Fayetteville Chamber Economic Development team as the point of contact for economic development for the City of Fayetteville.
Step Two focuses on explaining more in detail aspects about zoning compliance and the City’s Development Services Department.
Step Three introduces the various city departments and divisions that you will need to contact to get your site ready for business and in compliance with city ordinances. It also provides information on the HMR and alcohol tax.
Step Four contains important information about utilities and state permits that are necessary for the operation of your business.
Step Five contains important information on topics such as the Business License, and requirements such as taxes that must be completed at the federal, state, county, and city levels.
The last Step includes important information that should be considered when hiring employees.
Also included is a section covering other insurance considerations that, depending on your type of business, may be helpful to you.
Please note that the information in this book may undergo changes from time to time as some of the requirements change. It is best to verify with the respective offices to obtain the most current and accurate information.
Step One: Where To Go To Get Started
a) Fayetteville Chamber of Commerce
Whether you are considering starting or have decided to start your business, your first stop should be to visit with the Fayetteville Chamber Economic Development team. The team is the point of contact for economic development efforts for the City of Fayetteville.
The team functions as a solution provider to prospective entrepreneurs or businesses interested to set up a business in Fayetteville.
Please contact:
Chung Tan, Manager for Economic Development : ctan@fayettevillear.com
Address: Fayetteville Chamber of Commerce
123 W Mountain
Fayetteville, AR 72701
Tel: (479) 521-1710
Fax: (479) 521-1791
Step Two: Business Location, Zoning Compliance and Building Occupancy
When choosing a location to establish your business, you need to consider the zoning and building occupancy requirements in the city. Fayetteville has zoning ordinances and regulations that define how you can use your property. This is common in cities, counties and other local governments that adopt zoning plans and set development standards to ensure that land is used for the common good of the community.
Zoning laws come into play on all properties, regardless of size. If you are thinking about leasing or buying property, or making improvements to property you already own, make sure you understand the zoning restrictions before you commit to anything. Additionally, Fayeteville has adopted the International Building Code, which governs the use, construction and occupancy of buildings. The city's Building Official and Fire Marshall can assist you in determining what improvements, if any, are necessary to open your business.
Development Services Department
This department is a combination of the Animal Services, Building Safety, City Planning, Community Services, and Engineering Divisions. One of the primary responsibilities of Development Services is managing growth and development within the city and administering and enforcing the ordinances and regulations related to development to achieve a higher a quality of life for our citizens. The Department assists with rezoning, large and small-scale developments, subdivision of land, and building permit requests. City Planning also reviews permits for signage, parking, outdoor lighting and architectural design.
All businesses operating in the city with a physical address will come into contact with the Development Services Department annually. Businesses must obtain a Business License in order to operate, very similar to surrounding cities in Northwest Arkansas. Fayetteville offers an on-line application at a reduced rate, and all businesses, new and old, must be registered by October 31st, 2011. There is also an annual renewal of the business license, all administered through this Department.
Information on all permit applications and codes can be found online at the city's website.
125 W. Mountain Street, Fayetteville, AR 72701
Hours: Monday-Friday 8:00 am-5:00 pm
Tel: (479) 444-3443
E-mail: development_services@ci.fayetteville.ar.us
Step Three: Getting Your Site Ready for Business--City of Fayetteville
After you have determined that the site you have chosen is approved for your type of business, the next step is to visit the following City divisions to understand the various requirements for specific conditions:
a) General Contacts
1. Building Safety Division
- Arkansas Fire Prevention Code/Building Codes
- Permitting and Inspection Policies and Procedures
- Certificate of Occupancy and Occupany Load Calculations
All the permit applications, related documents codes and interpretations can easily be accessed through the in the following link: http://www.accessfayetteville.org/government/building_safety/index.cfm
Address: 125 W. Mountain Street, Fayetteville, AR 72701
Hours: Monday-Friday 8:00 am-5:00 pm
Tel: (479) 575-8233
E-mail: development_services@ci.fayetteville.ar.us
2. Solid Waste and Recycling
The City of Fayetteville Solid Waste and Recycling Division provides for the collection of Trash and Recycling within the City of Fayetteville and offers a variety of services to meet the needs of your business. Services include: commercial trash dumpsters, recycling collection, and large drop box service for the collection of construction or remodeling debris. Please contact the Solid Waste and Recycling Division to discuss options and begin service. Service information can easily be found at the following link: http://www.accessfayetteville.org/government/solid_waste/commercial/index.cfm
Address: 1560 S. Happy Hollow Road, Fayetteville, AR 72701
Hours: Monday-Friday 8:00 am – 5:00 pm
Tel: (479) 575-8398
E-mail: solidwaste@ci.fayetteville.ar.us
3. Business Office/City Cashier
At this office, you will complete the service agreement and application, post necessary deposits and be brought up to date with the requirements as set in the city ordinances.
Address: 113, West Mountain St., Fayetteville, AR 72701
Tel: (479) 521-1258
b) If your business is a Hotel, Motel, Restaurant or Sells/Serves Alcohol:
Hotel, Motel, Restaurant (HMR) Tax
In addition to meeting with all the divisions in Section (a) General Contacts, you will also need to visit with the Accounting Division in the City to register your business for HMR Tax purposes if you are in the prepared food business. HMR taxes are collected by restaurants, cafes, cafeterias, delis, concession stands, convenience stores, grocery store restaurants, caterers, and similar business. The tax is also levied on hotels, motels and bed and breakfast type of businesses. Currently, the HMR tax is 2% of gross receipts where 1% goes to the Advertising and Promotion fund and the remaining 1% goes to the Parks fund.
Address: Accounting Division, 113 W Mountain, Fayetteville, AR 72701
Tel: (479) 575-8281
2. Alcoholic Permit Applications
There are additional city taxes on alcoholic beverages in addition to the state taxes on the same items. If you sell or serve alcohol, you need to apply for an alcohol permit with both the City and the State. You must apply for the state permit before the city permit.
State Permit:
Address: Alcoholic Beverage Control, 1515 W 7th St., Ste. 503, Little Rock, AR 72201
Tel: (501) 682-1105
City Permit:
Address: Accounting Division, 113, W Mountain, Fayetteville, AR 72701
Tel: (479) 575-8281
3. Supplemental Beverage Tax
If you sell or serve alcohol, you will be required to file a supplemental beverage tax report and submit the taxes collected to the city.
All the forms and reports may be downloaded from the City’s website at:
Address: 113, West Mountain St., Fayetteville, AR 72701
Tel: (479) 575-8281
c) Existing Building
If you are modifying an existing building to accommodate your business, you will need to contact the Development Services Department for assistance in obtaining the proper permits, if any are needed.
Address: 125 W. Mountain Street, Fayetteville, AR 72701
Tel: (479) 444-3443
E-mail: development_services@ci.fayetteville.ar.us
d) New Building Construction
If you are building a new building for your business, you can also contact the Development Services Department for assistance in understanding the correct process for development through the planning, engineering and construction stages of site development. Please be aware that the process for approval and construction of a new building generally requires much more time from start to completion than occupying an existing building.
Address: 125 W. Mountain Street, Fayetteville, AR 72701
Hours: Monday-Friday 8:00 am-5:00 pm
Tel: (479) 444-3443
E-mail: development_services@ci.fayetteville.ar.us
Step Four: Getting Your Site Ready for Business—Utilities Providers & State Permits
a) Telephone services, Internet and Cable TV
Fayetteville is served by three companies for telephone services and high speed Internet.
1. Cox Communications:
Offers personal and business services including Cox advance TV, high speed Internet and Cox digital phone. In order to find the best service for your business, please visit the following web site: http://www.buycox.com/telephone. Most of Cox services may be ordered online. Or you can visit their offices in Fayetteville at 3390 N Futrall Dr, Fayetteville or call (866) 719-2045.
2. AT&T:
Offers a variety of services, including unlimited local and long distance for business that bundles unlimited local, local toll and nationwide long distance for one flat rate. This company offers options for small business and enterprises that could meet specific needs for your business. If you wish to contact this company you can visit the following link: http://www.att.com and click the small business option. You may also visit or call the stores that AT&T has in Fayetteville. Their locations are:
Address: 3075 N College Ave., Fayetteville, AR
Tel: (479) 444-9100 or
Address: 4201 Shiloh Dr., Space 1400, Fayetteville, AR
Tel: (479) 587-1030
3. Newroads Telecommunications:
Offers telephone and broadband Internet services to Fayetteville. For more information on its products and services, you may visit:
http://www.newroadstelecom.com/ or call (877) 643-0260.
b) Electrical Services
There are two electrical utility providers in the Fayetteville area. The company to service your business is determined by your business location.
1. AEP/Southwestern Electrical Power Company (SWEPCO):
To start a new service account with SWEPCO, be ready to provide your service location. You can also request a permanent service for your business or temporary service for constructions sites. SWEPCO offers several payment options including auto monthly withdrawal, paying in person, by phone or by mail.
For other customer service, please call: (888) 216-3523 (East TX, LA, AR); Para obtener ayuda en español, llame al (888) 216-3505.
2. Ozarks Electric Cooperative Corporation:
This company provides all rural and some city electric service. You may pay your bill online by logging onto your account on its secure website. Ozark customers may pay by credit or debit card or through your checking account. Ozarks Electric may also provide a postage paid envelope to the customer to pay an electric bill. Lastly, customers may pay in person at Arvest Bank, Bank of Fayetteville or Liberty Bank of Arkansas.
Address: 3641, Wedington Drive, P.O. Box 848, Fayetteville AR 72702
Tel: (800) 521-6144
c) Water Services
1. City of Fayetteville
Water service in Fayetteville is provided by the City of Fayetteville’s Water Department. When applying for water service, be ready to provide your personal information such as your name, address, business name, and phone number. Also, you will be asked for a deposit of $100 if you have not had a service before; this is for a commercial water service. For further information please contact:
Address: 113 West Mountain St, Fayetteville, AR 72701
Tel: (479) 718-7600
TDD: (479) 521-1316
Email: water_and_sewer_maintenance@ci.fayetteville.ar.us
d) Natural Gas Service
1. Source Gas LLC:
The company is the sole provider of gas service in Fayetteville and surrounding rural areas. Source Gas offers several payment options including Bank Draft Plan, Pay by Phone, Internet or Credit card, service mail or pay at an authorized collection agent.
The company offers energy management support to businesses. There are also rebate programs that businesses may qualify to apply.
Address: 655 East Millsap Dr., PO Box 13288 Fayetteville AR 72703-1002.
Tel: (800) 563-0012
Hours: Monday – Friday 8:00 am - 5:00 pm
http://www.awgonline.com
e) Health Permits
The Arkansas Department of Health requires restaurants, food services or food manufacturing, and other types of personal consumption businesses to have permits.
Address: AR Dept of Health, Office of Environmental Health
4815 W Markham St., Slot 46, Little Rock, AR 72205
Tel: (501) 661-2171
For more information: click here.
f) Tobacco Permits
The Tobacco Control Board issues specific retail, wholesale and manufacturer’s permits, plus cigarette vending machine permits and stamps.
Address: Arkansas Tobacco Control
101 E Capitol Ave., Ste. 401, Little Rock, AR 72201
Tel: (501) 682-9756
http://www.arkansas.gov/atcb/
g) Environmental-related Permits
Air pollution, solid wastes, stream pollution, and water quality permits may be obtained from the Arkansas Department of Environmental Quality.
Address: AR Dept of Environmental Quality
5301 Northshore Dr, North Little Rock, AR 72118
Tel: (501) 682-0744
http://www.adeq.state.ar.us/air/branch_permits/default.htm
Step Five: Logistics of Starting Your Business
a) Business License:
All businesses located within the city limits are required to obtain an annual business license. Early applications began on August 01, 2011, and may be completed and submitted completely online at a reduced rate. New businesses must register either before obtaining permits for construction or renovation or within 60 days of opening, if no permits are required to open the business. More information on the Business License and an application for registration may be found here.
Address: 125 W. Mountain Street, Fayetteville, AR 72701
Hours: Monday – Friday 8:00 am-5:00 pm
Tel: (479) 444-3443
Email: development_services@ci.fayetteville.ar.us
b) Doing Business As/Fictitious Business Name:
Arkansas law requires that anyone shall conduct or transact business in this state under the real name of the individual unless the person files a DBA (Doing Business As) certificate in the office of the County Clerk of the counties in which the person conducts his/her business. The types of businesses that would typically use the certificate are sole proprietorships and general partnerships. For more information:
Address: Washington County Courthouse
280 N College, Ste. 300, Fayetteville, AR 72701
Tel: (479) 444-1711
http://www.co.washington.ar.us/index.aspx?page=368
For corporations, filing an application for a Fictitious Name is made to the Arkansas Secretary of State. Filing may be done online.
Address: Secretary of State Business and Commercial Services Division,
Ste. 250, Victory Building, 1402 W Capitol, Little Rock, AR 72201
https://www.ark.org/sos/ofs/docs/index.php
c) Employer Identification Number (EIN)
In general, all businesses need to have an EIN, also known as a federal tax identification number. It is used to identify a business entity.
How to apply for an EIN?
Online:
The Internet EIN application is the preferred method for customers to apply for and obtain an EIN. Once the application is completed, the information is validated during the online session, and an EIN is issued immediately. The online application process is available for all entities whose principal business, office or agency, or legal residence (in the case of an individual), is located in the United States or U.S. Territories. The principal officer, general partner, grantor, owner, trustor etc. must have a valid Taxpayer Identification Number in order to use the online application.
https://sa2.www4.irs.gov/modiein/individual/index.jsp
Telephone:
Businesses can obtain an EIN immediately by calling the Business & Specialty Tax Line at (800) 829-4933. The hours of operation are 7:00 a.m. – 10:00 p.m. local time, Monday through Friday. An assistant takes the information, assigns the EIN, and provides the number to an authorized individual over the telephone.
Fax:
Businesses can fax the completed Form SS-4 application to (215) 516-3990. If the business fax number is provided, a fax will be sent back with the EIN within four (4) business days.
E-mail:
The processing timeframe for an EIN application received by mail is four weeks. Ensure that the Form SS-4 (PDF) contains all of the required information. If it is determined that the entity needs a new EIN, one will be assigned using the appropriate procedures for the entity type and mailed to the taxpayer.
Detail information and electronic SS-4 can be found at the IRS Small Business /self-employed community Website at: http://www.irs.gov/businesses/index.html
d) Taxes
In order to operate your business, you are required to pay and collect taxes. The Federal Government and the State Government require you to make the payment of several taxes. Keep in mind that the county where you live in and even the city where your operations are located will ask you to collect taxes for specific businesses as well.
1. Federal
i. Federal Income Tax:
The method of paying federal income taxes depends upon your legal form of business. The following procedures must be considered:
-
Sole proprietorship: You must file IRS Federal Form Schedule C with your personal Federal Income Tax return (Form 1040) and any other applicable forms that help to determine the gains or losses in your business.
-
Partnership: You must file a federal Partnership return (Form 1065). The form shows gross and net earnings of profit and loss. Also, each partner must report his share of partnership earnings on his individual form 1040 based on the information from the K-1 filed with the form 1065.
- Corporation: You must file a federal Corporation Income Tax Return (Form 1120). You will be required to report your earnings from the corporation including salary and other income such as dividends on your Personal Income Tax Return (Form 1040).
ii. Sales Tax Exemption Certificate:
If you purchase inventory or materials that will become part of your products to sell, you will need a Sales Tax Exemption Certificate. This Certificate exempts you from having to pay sales tax to your suppliers. In turn, you are required to charge sales tax to your customers and are responsible to remit those collections to the state.
For more information on sales tax issues, contact:
Address: Arkansas Department of Finance and Administration
1509 West 7th St, Little Rock, AR 72201
Tel: (501) 682-7104
iii. Self Employment Tax:
Every worker must pay Social Security and Medicare coverage. For the self-employed, the contributions are made through the self-employment tax.
2. State
i. State Income Tax:
Similar to the Federal Income Tax, every business will need to file state income tax, and the forms to use will depend on the structure of the business, such as proprietorship, partnership, LLC, etc.
ii. Sales Tax:
For vendors selling property or services, they are required to apply for a sales tax permit and collect and remit sales tax to the state. The rates of the sales tax are:
State Sales Tax 6%
Supplemental mixed drink tax
at restaurants 10% (excluding beer)
Additional mixed drink tax
“on premises” consumption 4% (excluding beer & wine)
“Off premises” tax 3% for both liquor and beer
For more information on Sales Tax,
Address: AR Dept of Finance & Admin, Sales and Use Tax Section
1509 West 7th Street, Little Rock, AR 72201
Tel: (501) 682-7104
www.arkansas.gov/dfa/excise_tax_v2/st_index.html
iii. Corporate Franchise Taxes:
All domestic for-profit corporations are subject to Arkansas Corporate Franchise Taxes. Corporations may file the Franchise Tax online. The tax rate varies according to the types of corporations. For more information:
Address: Secretary of State
Rm 256, State Capitol, Little Rock, AR 72201
Tel: (501) 682-1010
http://www.sos.arkansas.gov/BCS/Pages/franchiseTax.aspx
iv. Miscellaneous Tax:
There are over 20 areas of other taxation that include:
Timber Processing
Severance Tax on National Resources
Cigarettes
Tobacco Products
Cigarette Paper
Imported Wine
Domestic Wine
Liquor and Beer
Amusements
Real Property Transfers
Soft Drinks
Beef, Wheat, Rice, and Soybean Promotions
Swine pseudo rabies eradication
Merchandise Vending
Beauty Pageant Registration Fees
Bromine and Museum Fund
Waste Tire Fee
Corn and Grain Sorghum
Catfish Fee Assessment
Construction Permit Surcharges
Brucellosis Assessment
For more information:
Address: AR Dept of Finance & Admin, Miscellaneous Tax Section
1509 West 7th, Little Rock, AR 72201
Tel: (501) 682-7187
www.arkansas.gov/dfa/excise_tax_v2/mt_index.html
3. Washington County
i. Real Property Tax
Similar to individuals, businesses are required to assess their real property with the Washington County Assessor’s Office and subsequently pay property tax on them.
ii. Personal Property Tax
In addition to real property taxes, businesses also are required to assess personal property (such as vehicles, computers, etc.) that is used in the business and pay personal property taxes on them.
Address: Washington County Courthouse
280 N. College, Fayetteville, AR 72701
Tel: (479) 444-1711
www.co.washington.ar.us
4. City
This section is covered under Section IV (b).
Step Six: Employee Considerations:
Bringing employees on board to work in your business is an exciting milestone. You’ll want to ensure that you are conducting employment processes in accordance to the laws. Familiarize yourself with federal and state employment and labor laws, including discrimination and harassment, terminations, safe and drug-free work environments, and benefits and wages.
The following information will help you understand some basic federal and state labor laws you will need to consider when hiring employees.
a) Social Security Number (SSN):
You are required to get each employee's name and Social Security Number (SSN) and to enter them on Form W-2. This requirement also applies to resident and nonresident alien employees. You should ask your employee to show you his or her social security card. You may, but are not required to, photocopy the social security card. Record each new employee's name and social security number from his or her social security card. Any employee without a social security card should apply for one using Form SS-5, Application for Social Security Card
http://www.socialsecurity.gov/employer/pub.htm
b) Employee Eligibility Verification (Form I-9):
Federal law requires employers to verify an employee's eligibility to work in the United States. Within three days of hire, employers must complete an Employment Eligibility Verification Form, commonly referred to as an I-9 form. This requires you to examine acceptable forms of documentation supplied by the employee to confirm the employee's citizenship or eligibility to work in the U.S. Employers can only request documentation specified on the I-9 form. Employers who ask for other types of documentation not listed on the I-9 form may be subject to discrimination lawsuits.
c) Tax Withholdings
1. Federal Income Tax Withholding (Form W-4):
Every employee must provide an employer with a signed withholding exemption certificate (Form W-4) on or before the date of employment. The employer must then submit Form W-4 to the IRS. This form will indicate on the amount of taxes to withhold from the wages of the employees. The withheld taxes are then sent to IRS.
2. State Income Tax Withholding
Employers are required to withhold state income taxes from wages of employees. A new employer is required to register by completing a registration packet from the Arkansas Withholding Tax Section upon hiring the first employee. Employers are required to remit monthly the full amount withheld from the wages of all employees. For additional information, contact:
Address: AR Dept of Finance & Admin., Withholding Tax Unit
1509, West 7th Street, Little Rock, AR 72203
Tel: (501) 682-7290
www.arkansas.gov/dfa/dfa_taxes.html
3. Social Security and Medicare Withholding Taxes:
Similar to the Federal Withholding Tax, employers must withhold social security and Medicare taxes and remit them to the IRS on a periodic/quarterly basis.
For more information, contact:
Address: Social Security Administration
Tel: (800) 772-1213
www.ssa.gov
d) Federal Wage and Tax Statement (Form W-2):
On an annual basis, employers must report to the federal government wages paid and taxes withheld for each employee. This report is filed using Form W-2 Wage and Tax Statement. Employers must complete a W-2 Form for each employee to whom they pay a salary, wage or other compensation. Employers must send Copy A of Form W-2 to the Social Security Administration (SSA) by the last day of February (or last day of March if you file electronically) to report the wages and taxes of your employees for the previous calendar year. In addition, employers should send copies of Form W-2 to their employees by Jan. 31 of the year following the reporting period.
e) Workers' Compensation Insurance
In general, most employers in Arkansas with 3 or more employees are required by law to have workers’ compensation insurance coverage for their employees. The insurance is purchased by the employer and no part of it should be paid for by employees or deducted from their pay. The coverage is provided through the workers’ compensation insurance policy or by the employer receiving state approval to be self-insured for such purposes. For more information:
Address: AR Workers’ Compensation Commission,
324, Spring St., Little Rock, AR 72203
Tel: (800) 250-2511 or (501) 682-3930
http://www.awcc.state.ar.us/employerbasicfacts.html
f) Unemployment Insurance
1. Registration:
Businesses with employees are required to pay unemployment insurance taxes under certain conditions. If your business is required to pay these taxes, you must register your business with your state's workforce agency. You may register online at: https://www.employment.arkansas.gov/ERSWeb/ers/Security/WelcomePage.jsp
2. Tax:
A business with no previous employment record in Arkansas is taxed at 3.6% on the first $10,000 of each employee's earnings until an employment record is established, usually three to five years. The tax is determined by past experience and the amount of the reserve-ratio. The reserve-ratio is the excess of contributions paid over benefits charged as related to payroll. The higher the reserve-ratio, the lower the tax ratio.
For more information, contact:
Address: Arkansas Department of Workforce Services
2143 W MLK Blvd., Fayetteville, AR 72701
Tel: (479) 521-5730/(479) 587-3086 (auditor)
For the unemployment insurance handbook:
http://www.dws.arkansas.gov/Employers/PDF/UI_EMPLOYER_HANDBOOK.pdf
g) Employee Records
Employers are required to maintain records on wages, hours and other items. For more information on labor laws:
Address: Arkansas Dept of Labor- Wage and Hour Division
10421 W Markham, Little Rock, AR 72205
Tel: (501) 682-4505
http://www.arkansas.gov/labor/divisions/index.html
Other Insurance Considerations
a) Commercial Property Insurance:
Property insurance covers everything related to the loss and damage of company property due to a wide-variety of events such as fire, smoke, wind and hail storms, civil disobedience, and vandalism. The definition of "property" is broad, and includes lost income, business interruption, buildings, computers, company papers and money. Property insurance policies come in two basic forms: (1) all-risk policies covering a wide-range of incidents and perils except those noted in the policy; (2) peril-specific policies that cover losses from only those perils listed in the policy. Examples of peril-specific policies include fire, flood, crime, and business interruption insurance. All-risk policies generally covers risk faced by the average small business, while peril-specific policies are usually purchased when there is high risk of peril in a certain area. Consult your insurance agent or broker about the type of business property insurance best suited for your small business.
b) Professional Liability:
Business owners providing certain services should consider having professional liability insurance (also known as errors and omissions insurance). This type of liability coverage protects your business against malpractice, errors, and negligence in provision of services to your customers. Depending on your profession, you may be required by your state government to carry such a policy. For example, physicians are required to purchase malpractice insurance as a condition of practicing in certain states.
c) Home-Based Business Insurance:
A. Contrary to popular belief, homeowners' insurance policies do not generally cover home-based business losses. Depending on risks to your business, you may add riders to your homeowners’ policy to cover normal business risks such as property damage. However, homeowners’ policies only go so far in covering home-based businesses, and you may need to purchase additional policies to cover other risks, such as general and professional liability.
d) Key Employee or Key Man Insurance:
Nearly every business has key employees who are critical to the overall success and profitability of the business. Key employee life insurance is insurance on the life of a key employee, purchased to reimburse an employer for the economic loss caused by the death of the employee. As such, key employee life insurance is not a specific type of life insurance policy; rather, it is an effective way for a business entity to use life insurance.
e) General Liability Insurance:
Business owners purchase general liability insurance to cover legal hassles due to accident, injuries and claims of negligence. These policies protect against payments as the result of bodily injury, property damage, medical expenses, libel, slander the cost of defending lawsuits, and settlement bonds or judgments required during an appeal procedure.
For comments/questions, please feel free to contact:
Chung Tan
Chamber Manager
Economic Development
123 W. Mountain/P.O. Box 4216
Fayetteville, AR 72702-4216
Phone: (479) 521-1710
Fax: (479) 521-1791
ctan@fayettevillear.com
www.fayettevillear.com