Many of us get so busy running our ventures and handling problems that crop up unexpectedly that we don’t put enough weight on the need to mitigate risks beforehand. No matter what type of operation you have, it’s vital to put some strategies in place to minimize issues. One way to do this is via business insurance.
However, with so many different types to choose from and different products on the market, it can be daunting to find the right product(s). Read on for some of the key things you should consider when buying business insurance this year.
Know Where Risks Most Lie for Your Business
Start by working out where the most risk lies for your venture. There will be some things specific to your organization and some that are relevant for everyone in your industry. For instance, restaurant owners need to think about the risk of diners getting sick after eating at their venues, while accountants can be concerned about making mistakes on client tax returns. Both situations could lead to a business or entrepreneur being sued.
Make a list of all the areas in your operations vulnerable to potential issues, whether it’s things like work being shut down for a period, employees being hurt on the job, data breaches, or any other risk. You’ll likely find more potential areas to worry about than you initially thought.
Understand the Types of Insurance on Offer
Once you’re clear about where you have risks in your business that you can offset with insurance, it helps to know which insurance types to buy. There are multiple options these days, and you will likely need more than one for your organization. It all comes down to business activities and assets. Some insurances are legally required by state or federal government departments or by other organizations such as licensing membership groups.
You may need, for example, workers’ compensation insurance, which covers medical expenses and lost wages if staff members end up with work-related injuries or illnesses. Professional liability insurance is popular and gets used by businesses that provide professional services and want to guard against lawsuits over negligence, errors, oversights, etc.
General liability insurance is handy, too, since it covers a variety of liability lawsuits, including third-party property damage or injuries, plus copyright infringement and defamation. With hackers so rife, you may want to get cyber liability insurance to help you cover costs of a data breach or other digital security factor, including being sued by clients for their information getting breached via your company.
Commercial property insurance is often a must. This will cover your costs to replace or repair business goods that get lost, stolen, or damaged, whether equipment, stock, workspaces, furniture, or other pieces. There’s a business owner’s policy, too, which combines general liability and commercial property insurance.
Other products to investigate include commercial auto insurance and business interruption insurance, for times when your venture can’t operate temporarily due to natural disasters, fires, and other sudden events.
Learn What Affects Insurance Rates
You naturally want to pay the lowest insurance rates possible and save money. As such, it helps to learn which factors may affect costs. For instance, your claims history and the number of years your business has been trading can impact quotes, as can the size of your company, the location of your head office or locations, and the value, number, and type of assets you want to insure.
Taking measures to reduce the risk of issues occurring can also help reduce your insurance fees. Plus, you can install security cameras and alarms, utilize comprehensive security guarding services, put deadbolts and sensors on doors and windows, and make sure premises have fire alarms and suppression systems.
Using top-notch security software programs and firewalls can help, as can doing everything possible to ensure a safe work environment for your team, so they’re less likely to get hurt. Keeping those with poor driving records from operating business vehicles can be wise, too, if you want to keep costs as low as possible.
Other things to consider when buying business insurance include:
- Overestimating rather than underestimating your needs; you don’t want to end up insuring items or data for too little
- Thinking about what you might need in the future and how business risks and values may change over time
- Getting multiple insurance quotes so you can compare prices, but also using other elements beyond price in your evaluation process
- Checking out testimonials and reviews for insurance companies and products
- Reading the policy fine print carefully
Do your due diligence before investing in business insurance so you don’t waste your money on a product that doesn’t do what you need it to. Don’t be afraid to ask insurers for clarity on what their offerings do and don’t cover, too.