In Alaska, there are many business owners that have ownership shares in more than one company. In some cases these companies could be in supportive or related industries, and in other cases the industries will vary greatly.
In some cases, you might have minority ownership in multiple businesses, and in other cases you might be the sole owner of multiple businesses. Regardless of the dynamics, it’s important to work with a risk management professional to properly address the insurance and risk concerns of each business. Often the structuring of multiple entities is done in conjunction with a tax professional, there are advantages to setting up business operations in certain ways, and it’s important to have a tax professional to consult you on those, but the insurance should also be given adequate consideration.
If you have a business owner who does roofing, and he also wants to open a coffee shop, you wouldn’t want to have those businesses covered under a single policy. They are too diverse, and with the greater risks that come with roofing, that entity should be segregated with its own coverages and risk management concerns, and the coffee shop addressed separately.
In the case of a business owner who own a cannabis cultivation business and a retail cannabis store as seperate entities, there is an opportunity there to potentially insure the two entities under a single policy. The downside is that they would share limits, the benefit is that you might be able to save on some cost, particularly in cases where you run into minimum premiums. In the surplus line markets it’s no uncommon with some industries to hit $ 5,000 or $ 10,000 minimum premiums and if you are a small business where controlling insurance costs are important, particularly when starting out, there might be opportunities to cover more then one business and save on cost.
Similar circumstances might guide companies or organizations that have subsidiary operations. There might be times when it makes sense to have segregated insurance programs, and there may be cases when it makes sense to take a more consolidated approach. It really just depends on the specifics of the business, budgets and owner preference when deciding the best route to go.
“What do you need to start a business? Three simple things: know your product better than anyone. Know your customer, and have a burning desire to succeed.” – Dave Thomas, Wendy’s Inc