Small businesses owners must approach their businesses the same way they handle their vehicles, homes, and their lives—they insure them. When looking for proper coverage for small business insurance there are few key things to remember:
IT’S CHEAPER TO KEEP IT
The current recession has led many people to slice their personal budgets to save money. Business insurances are not immune to the occasional lapse in coverage. When allowing their business insurance to go through such a lapse, or failing to purchase a policy, owners should remember one important thing, DON’T. It’s never worth the risk, and it’s usually not as expensive, as one might think. Some negotiation on a small business owner’s part will surely lighten any expensive premium payments. Since small business insurance is specialized, it’s best to work with an agent that specializes in that field. It’s also better not to use different companies for different parts of your business. This could cause unforeseen gaps in coverage.
KNOW YOUR BUSINESS’S NEEDS
Three basic types of business insurance are needed for full protection: property, liability, and workers’ compensation. Small business owners can take advantage of a Business Owners Policy (BOP). BOPs package liability and property coverage for eligible business owners. Worker’s Compensation is also required in every state if a business has employees or hires contractors.
In addition to BOPs, business owners may want to find special coverage for extra protection. For example, an attorney may want professional liability insurance for claims against improper legal advice. Small business owners should carefully assess their company’s risks. Whether the business provides products or services, owners should have an understanding of what risks are inherent to their business. Avoiding unnecessary costly coverage is key to maintaining manageable premiums.
FIND A GOOD AGENT OR BROKER
Not all insurance companies are created equal, neither are all agents. Making sure you select a knowledgeable and competent agent or broker will ensure you get an accurate and effective insurance quote. Be prepared before sitting down to meet with any agents, compile a list of recommended agents, brokers, and insurance companies. Having all your company’s information and needs ready when obtaining a quote, will help you appear insurance savvy. Agents will be more likely to offer you the lowest rates. Any business owner should know the difference between an agent and a broker. A broker will do the work of directing you to the best agency or policy for your specific needs.
ASK YOUR NEIGHBORS
Inquiring with other businesses about their satisfaction with their insurance company is another good place to start. Focusing on businesses in your industry helps keep all advice comparable. Home-based business insurance has slightly different needs, but it is no less important to maintain. More than 50% of home-based businesses are underinsured according to the National Bureau of Labor Statistics. When dealing with home-based businesses, it’s important to remember that your homeowners’ policy may not cover anything used for business purposes. For instance, any building additions or converted garages often will need to be covered by a separate policy.