Business insurance coverage protects businesses from losses due to events that may occur during the normal course of business. Without business insurance, business owners may have to pay out-of-pocket for costly damages and legal claims against their company. Below are a few things you need to consider.
When looking for business insurance, keep the following in mind:
- Understand your legal obligations: Not all small businesses have to buy insurance, it depends on the industry, laws, risks and other requirements for example if the business is buying vehicles using financing from banks etc. they require vehicle insurance.
- Know your industry and workplace area’s risks: What might be very necessary for one industry might not be for another, don’t get insurance that does not match your needs. If the area your business is based on is less safe, make sure you have taken all the proper measures in case of break-ins, theft etc.
- Coverage is more important than costs: Once you know what you need, the next step is how much it costs. Make sure your cover is enough that your excess payments are not going to break the bank. Beware of cheap policies as they most likely do not cover as much, the insurance company might have shady practices, or you are paying without getting the right cover to help lessen the costs or their premium prices go up without warning.
- Work with top rated providers: If the company has a good rating then you can feel at ease knowing your insurance providers are reliable, prompt payouts and consistent terms. Speak to an agent who understands your industry.
- Read your policy: Polices change from one provider to the next and there may be a lot of conditions and exclusions if you are not careful. Make sure you understand what each part means so that you won’t have any unexpected surprises if or when you need to file a claim.
- Consider the deductibles: Ensure that the deductible amount is not so high that you are still out of pocket because you wanted to save on the premiums. There needs to be a good balance.
- More is better: It is always safer to overestimate when it comes to insurance. Legal fees can become very costly and if you are not covered enough, it could hurt the business financials. One way to assist with this is to get commercial umbrella insurance. This offers extra liability coverage in circumstances where the legal fees exceed your policies limits. It can be supplemented to existing policies for ease.
Keep the following in mind to make your decision easier:
- Speak to an insurance agent who understands your industry, needs and business goals. They can show you what coverage would work best and can explain all the finer details you might not understand. Be sure to take note as claims will be refused if you do not comply with all their regulations.
- Review and update your policies annually to ensure that you are covered for everything, and immediately if the business has expanded or acquired more assets.
- Try to negotiate with your insurance agent when you are signing up for your insurance, they might be able to give you a better price, especially if you are low risk.