Business owners face a number of headaches when it comes to insuring their company’s property, equipment, and vehicles. The most common problem they run into is not having enough coverage. Not having enough coverage can be especially tricky for smaller business owners who are just getting started. There are numerous small and large differences between insuring your personal residence, your vehicle, and your business. All of these have to be taken into account before making a final decision on which type of insurance is right for your business. If you are like many small business owners out there, you might be confused by the number of options available. That’s why we’ve compiled a list of helpful tips that will help you understand what kind of insurance coverage is best for your business.
Get to Know Your Insurance Options
There are a number of factors you will want to take into account when you are deciding what kind of coverage to offer your employees, customers, and/or suppliers. In all cases, you will want to ensure that the level of coverage you choose is commensurate with the level of risk you are trying to protect against. There are three types of insurance available for businesses: general liability, commercial auto, and business homeowners. Each type has its own specific coverage requirements, so it’s critical to get to know your insurance options. It is also critical to know your insurance company. Some insurance companies have very generous product lines, while others may only offer bare bones coverage. Get to know which insurers write under your company’s name, and make sure they are in your home state.
Plan For The Bottom Line
The most important thing you can do is plan for the worst. In many cases, this is the most expensive part of the insurance coverage decision-making process. You will want to make sure you have enough coverage to protect your business against all possible outcomes, both good and bad. Remember, no two businesses are identical, so it is important to account for this in your insurance coverage. If you’re growing your business, consider increasing your auto coverage. If you have employees, consider adding their health insurance. And if you operate in a certain industry, you may want to add specific types of coverage to protect yourself against certain risks.
Make A List Of Criticality And Interruption Risk Factors
One of the most important things you can do is make a list of all the criticality and interruption risk factors that play into your business insurance coverage decision. These factors will help you analyze your business’s unique risk profile and determine which coverage might be right for your business. Key factors to include in your criticality and interruption risk factor list are employee count, the number of pies you are serving, your average revenue per day, and the average number of customers you serve each day.
Get A Third Party Insurer Review On Your Record
You can’t just throw money at an insurance problem and hope for the best. It might result in something much less than coverage you would have obtained on your own. That’s why it is a smart idea to get a third party review on your business’s record with the insurance companies you are thinking of insuring with. You don’t have to use the same insurance companies you have your car and home insurance with. You could use an insurance broker who is not involved in your car or home insurance contract, or you could choose to go with a third party review company. The choice is yours, but it is worth taking the extra few minutes to make sure you are not choosing the wrong insurance company.
Assessing Your Business’ Baseline
Once you have chosen the insurance company you want to work with, it is time to assess your business’s actual risk. You will want to determine how much coverage you actually need, and what is necessary for the level of risk you are trying to protect against. Some companies will base their rates on your business’ actual risk, but you should always get a apples-to-apples comparison of your own risk against the risk assessed against your business. When you have your actual risk assessment document ready, take a look at how your business compares with the rest of the industries in your state. This will help you determine if you need additional coverage.
Wrapping Up
The insurance coverage decision is one of the most critical and difficult parts of starting an insurance company. It is also one of the more critical factors in determining the success of your company. There are a lot of unknowns when it comes to building insurance coverage for your business. You will want to make sure that the level of coverage you choose is commensurate with the level of risk you are trying to protect against. Get to know your insurance options, plan for the bottom line, and make a list of criticality and interruption risk factors. Then, use those factors to help you make your final decision on which insurance coverage is right for your business.
