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No matter the size of your business, what is right for one person may not be right for another. Do your homework so you can choose and pay for the coverages you really need.
The best way for new entrepreneurs to manage and mitigate the risks associated with their day-to-day activities is by purchasing a business insurance policy. However, you need to know what your options for business insurance are, as well as what insurance is legally required.
Know the Different Types of Business Insurance
Many small business owners need small business insurance because it protects their company against risk. Besides tools and equipment, you may also want to consider the equipment you require for your business’s success, for instance, your computers and software. Certain insurance policies provide coverage for these items.
Small Business Car Insurance
Small business car insurance covers medical expenses and property damage, depending on how severe the accident is. The policy includes coverage for legal expenses in case you are sued. The policy may cover vehicle theft, vandalism, and other losses or damages.
Most commercial auto policies include liability insurance to cover your business’s legal costs if one of your employees gets into an accident.
General Liability Insurance
A business general liability insurance policy can assist you in protecting your business from bodily injury and property damage claims in addition to protecting you from legal action for libel and slander.
Professional Liability Insurance
Taking out professional liability insurance can protect your finances if you or one of your employees makes a mistake in the professional services you provide. This coverage is sometimes referred to as errors and omissions insurance.
Professional liability coverage protects you against lawsuits alleging errors in your professional services. This coverage can help protect your business from court costs if you get sued so you don’t have to worry about losing money.
Commercial Property Insurance
Commercial property insurance helps protect your business and its physical assets. This type of insurance may include coverage for damage or destruction of your business property as a result of a fire, theft, or other covered loss.
Business Income Insurance
Business income insurance covers income loss as a consequence of covered events such as property damage, fire, theft, and others. You can select several coverage options to meet specific coverage requirements.
If serious damage occurred to your business, your business income insurance may prepare you financially for the time being. This will enable your company to continue to pay expenses such as payroll and monthly bills while your business property is being repaired or replaced.
Workers’ Compensation Insurance
Workers’ compensation insurance provides benefits to your employees in the event that they suffer an injury or sickness at work. If you or your business is sued by an injured employee or their family, these insurance benefits may help cover your legal costs.
Shop Around for a Policy That Fits Your Needs
According to the Small Business Administration (SBA), small businesses with employees must carry workers’ compensation insurance, unemployment insurance, and disability insurance in most states.
However, you need to make sure that you check what you’re required to have depending on the size and type of your business. Many companies, like Breeze, offer different types of insurance plans based on your specific needs, so be sure to figure out exactly what you’re looking for before making any final decisions.
Compare policies to find the right coverage at a fair price. You should compare the insurance policies of multiple agents for costs, terms, and benefits. Make sure you request multiple quotes from carriers or work with an independent agent that specializes in both small business insurance and home insurance.
Bundle Your Insurance Policies Together
Although the insurance industries differ, many insurers offer reduced prices for combined coverage policies, similar to the discounts offered for combining home and business policies.
If you are not familiar with the insurance discounts offered by an insurance company, you can ask a customer service representative to explain the different policies and discounts available.
Bundling policies is the simplest way to combine multiple insurance policies. A business owner’s policy is the most common method of packaging commercial insurance policies.
It generally combines general liability and building insurance at a reduced cost. However, not all policies need to be bundled. If more complex situations exist, it is best to contact a specialist in the field to ensure that you are properly protected.
Update Your Insurance Plans as Your Business Changes
A company’s insurance needs to change as the business changes, and when a major change occurs in company policy, it can affect your business in many ways. You may be overpaying for coverages you no longer require if you do not update your policies to reflect significant changes.
If your company starts making lots of money, you might need to adjust your insurance limits so you are not underinsured when something goes wrong. You will need to update both your general liability insurance and property insurance.
If you decide to hire or fire employees, this will affect your workers’ compensation insurance needs, and you must update your policy. Any new investments or additions in commercial real estate or new equipment purchase is also a good time to update your property insurance coverage to reflect these new assets.
Consider customizing your existing coverage by changing your insurance details. You may be able to lower your annual premium by selecting a lower deductible or a walker policy limit. Make sure that you choose the appropriate option for the cash flow of your business and the degree of risk you are willing to accept.
If you decide to start providing new services, this may adversely impact any insurance options you have. Your agent will need to change your business insurance policy to clarify that the new service that you offer is covered.
Remember to adjust your insurance policy payment terms at the renewal of each term. You may also consider whether paying your insurance policy in full upfront or changing the payment terms would benefit you.
Even if paying in payment installments does not impact your premium, some may prefer to reduce the amount of billing charges due in each payment. Savings from these programs can add up substantially.
Don’t ignore the opportunity to review your policies at renewal. If you have changed your business model, size, geographic market, payroll, or exposures in the past year, ensure that your new policies take these changes into account.
Don’t Pay for Policies Your Business Doesn’t Need
Ask your agent about discounts and how to save money. Your insurance broker may be able to suggest tips to help you better manage your risk or suggest ways to earn credit for a premium down payment. Savings can be achieved through discounts for claims-free coverage, loss prevention programs, and group rates.
Find an insurance professional that knows your specific industry. This kind of insider knowledge contributes greatly to the efficiency of your policy and all its coverages. You do not have to explain the inner workings of your business since your agent already has an understanding of how your particular industry works.
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