Premiums for fire, casualty and burglary insurance on business property are all deductible for tax purposes as trade or business expenses. If a business taxpayer has a self-insurance plan, however, all payments into the self-insurance reserve will not be tax-deductible for purposes; the actual losses incurred by the taxpayer would be the deductions.
Premiums for life-insurance are tax-deductible. But premiums paid on a policy covering the life of an officer, employee or other key person are not deductible if the business is a direct or indirect beneficiary under the policy. Premiums paid on a life insurance policy of which the business is a beneficiary are not deductible, since life-insurance proceeds would not have to be included in taxable income when received by the company.
Before speaking with an insurance representative, write down a clear statement of your expectations.
Do not withhold any important information from your insurance representative about your business and its exposure to loss. Treat the individual as a professional helper.
Get at least three competitive bids using brokers, direct agents and independent agents. Note the interest that the representative takes in loss prevention and suggestions for specialty coverage.
Avoid duplication and overlap in policies; you will be paying for insurance you do not need.
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