Insurance is critical to the operations of any small business. However, reading an insurance policy is not always easy. How do you know if your insurance policy is actually giving you the protection that you need? Are you properly insured?
How to Make Sure that Your Business is Properly Insured
Here are 7 crucial questions to help you determine your insurance and risk management needs:
- Do you own the facility? If yes, is the replacement amount on the policy sufficient to cover a total loss to that facility? If no, do you have the proper coverage as required by the lease?
- Are customers regularly on the premises? If yes, does your present coverage adequately protect you from them?
- Are there employees on the premises? How many? Who does what?
- Is there inventory on premises? Is it properly valued to cover a loss?
- Is there equipment on-site, which is leased and, if owned, properly valued?
- Would the loss of a piece of equipment interrupt the entire process? If the answer is yes, would this disruption cause a significant loss to the business? Is the company covered under any of the present coverage?
- Do you depend on suppliers for key aspects of this process, and if so, would the loss of this supplier interrupt the process in any way?
By answering the questions above, you will be able to define your risks and determine what you will need to protect yourself in the event of an accident or disaster.
Why you Need to Learn about Insurance
Not properly managing your insurance program can cost your business thousands, if not millions, of dollars. It may not be easy, but you need to learn about insurance and protecting your business from risk. You cannot just rely on your insurance agent.
Insurance costs can add up – so it is important that you know how to control and improve your insurance costs. Here are steps on how to achieve this:
1. Understand the language
Like any other specialization, insurance has a language and cadence all its own. You must learn the language to understand the process.
2. Know the players
Once you understand how all the pieces fit together, you will better understand the process. Better understanding leads to better management, which leads to savings.
3. Develop a strategy
Just as your business has a game plan (for example: goals, vision, mission, five-year plan), there are subtle yet distinct ways to work your insurance program to maximize your coverage for minimal cost.
4. Invest the time
You spend years and years going to school so you can get a good job or start your own business. You go to conferences and seminars to aid in your development as your career progresses. If you take the time initially to learn about insurance, how it works, and how you can make it work for you, it will help you reap real financial benefits while providing the maximum coverage for your company.
By learning more about insurance, you can make better decisions about managing risks of your business.