Small Business Insurance Tips

Every business faces particular risks and has unique insurance requirements. Consequently, buying a generic insurance policy does your business a disservice. Consider these tips to maximize your insurance dollar and simplify the buying process.

Check Your Credit First

Before you even consider buying an insurance policy, review your business credit profile. Most insurers check it as part of the underwriting process. Discover where to get one free and what the credit report means for your company.

Liability & Property Insurance Essential

Insurers always recommend general liability and commercial property insurance first. These protect your business from third-party liability and safeguard business property and equipment.

General liability insurance compensates your company for costs such as legal and court fees and settlements for injuries or accidents that occur on your company’s property. It also covers lawsuits for copyright infringement, slander and libel.

Many business owners choose a business owner’s policy (BOP) instead of separate policies, since it offers more value. It may also include additional protection for non-owned or hired vehicles.

Don’t Ignore Cyber Liability Insurance

Cybercrime is a huge risk for companies, regardless of size. Unfortunately, many small and medium-sized businesses ignore the risk, because they believe it’s something that only happens to big corporations. That’s not the case.

According to the 2018 Hiscox Small Business Cyber Risk Report almost half of small US businesses suffered a cyberattack in the past year. Small business is less likely to have what they need to ward off attacks and they can’t detect hacks or breaches quickly either. Consequently, they’re also less likely to survive their devastating financial implications.

Analyze Risk

Many businesses buy a business owner’s policy and that’s the end of it. However, insuring your business well must include a risk analysis and a BOP has limitations.

For instance, if you run a business that produces products, could you still keep your business running if your operation burns down? Sure, your property insurance covers the cost of rebuilding, but what about the rent or mortgage, taxes, and salaries in the meantime. Business interruption insurance could provide you with the cushion you need during recovery.

If you have employees, you need to consider more than mandatory insurance such as workers’ compensation, unemployment, and disability insurance. Employees are one of your company’s greatest assets, but they can also be a liability.

Wrongful termination, discrimination, and harassment are a threat to any business. Employment practices liability insurance can help you cover the fees related to a lawsuit of this nature.

Professionals that offer advice or make recommendations to clients also need to consider further protection than what a BOP and general liability insurance offers. If a client claims your service caused them a financial loss, they could sue.

Companies selling products online also need additional coverage. Defective products can lead to expensive lawsuits, but product liability insurance can protect you.

Don’t Go It Alone

Buying the cheapest policy isn’t necessarily the right decision for your business. Instead of going it alone, rely on a professional insurance agent that knows your industry and works with small business. Provide them with detailed information about your operation so they can accurately align coverage with your needs.

They do the legwork and have many more resources at their disposal. They also understand many of the hidden risks associated with your business type and recommend what provides the best value for your insurance budget.

A good agent navigates the complex insurance industry, actively seeks discounts, finds the best deductibles, and bundles coverage when it benefits your business.

Understand What You’re Buying

When you buy a policy yourself, you might not understand exclusions, limitations, and policy endorsements that could severely impact your business should you ever need to file a claim.

A professional insurance agent explains everything in layperson’s terms and answers any questions you might have. Don’t assume your policy protects your business – understand what it does, and doesn’t cover to understand your risk.

Regular Insurance Reviews

It is very important that you review your insurance annually. Your business constantly changes and so should your coverage and you certainly don’t want to pay for coverage you don’t need.

If you run your business from home, don’t rely on your homeowner’s insurance policy either. Insurers often deny business-related claims. Get advice from a good agent to protect your home-based business.