You need numerous things in order to start and run a business. Products or services that customers need, adequate capital, facilities and staff and organizational strategies to keep your operation solvent and running smoothly are just a few. However, obtaining insurance for your business may be one of the more overwhelming and misunderstood necessities of being an entrepreneur.
Choosing not to purchase business insurance is not an option. It protects both you and your clients against a number of situations, including natural disasters, personal injuries and even mistakes that you or your staff may have made in the performance of your work. The questions come in when you are trying to decide which insurance to buy and from whom. Here are some general tips that can help to make the process of getting affordable business insurance a bit easier.
Do Some Legwork
View this process in the same way you would think about purchasing a vehicle for yourself or your business. Do your homework before you begin to talk to different companies by conducting some online research of your own. Think about your business and its assets. Ask yourself what could be the most catastrophic to your company. Then begin to shop around. Just like car sellers, insurers’ prices can vary greatly, so don’t let yourself be hooked in by the first one you come upon. Be sure to check reliable sources such as A.M. Best and Standard & Poor’s to verify that the company you like best is reliable and has a good track record. Finally, if you are running your business out of your home, see what your current homeowners policy covers. Don’t assume anything, but ask your agent about the cost of adding riders that could cover your business.
Make Good Deductible Decisions
In one respect, people are always looking for the lowest deductible possible on their insurance. Should a relatively small claim need to be made, a higher deductible might make doing so impossible. However, with a deductible of a lesser amount comes higher ongoing premiums. Therefore, you need to balance the likelihood that you will be filing a claim – something that is often impossible to predict – against the very predictable reality of higher payments. Often, the prospect of lower premiums is a better idea in the long run.
Get A Package Insurance Deal
With business insurance, you have the option of purchasing the different types you will need a la carte or in one big package. The latter option is known as a Business Owners Policy (BOP) and provides small- to medium-sized business owners with limits of liability and coverages that usually meet most of your conventional needs.
Keep Your Agent In The Loop
Once you do have a policy, it is crucial that you keep your agent informed about any changes in your business, including things like expansion, large purchases or the nature of what your business is selling. Also, don’t hesitate to use your agent as a resource. Ask about how to best prepare for a disaster and how to lower your risk for fires and work-related accidents. Finally, make sure you thoroughly understand what to do if a catastrophe strikes, and keep that written information at a separate location.
Take Steps To Lower Your Premiums
In collaboration with your agent, institute procedures that may work to reduce your insurance payments. Tell your agent about any and all steps you have taken to make your workplace safe and your staff trained in disaster preparedness. Even a new security system and non-slip flooring in your food preparation area could take a chunk out of your payments.
Like it or not, coverage for your business is a must. However, you can take steps that will make affordable business insurance a reality. Once it is in place, you can rest a little easier knowing that you are protected from the unexpected.