Each small business owner out there needs to know how to manage their risk and protect their company. Selecting an insurance policy is among the best and easiest ways to do that. The proper insurance protection can help each owner’s business venture to get off the ground and thrive into a successful business.
But, while selecting the most suitable small business insurance is a crucial part of any business plan, the process itself can prove to be a bit overwhelming, particularly for first-time owners who’ve never purchased coverage for their business before.
So, if you’re a small business owner struggling to find the right business insurance for your company, you’re at the right place. The 5 tips below will help you understand your coverage options to find the insurance policy you need at a price that fits your budget.
Know the Different Types of Business Insurance for Small Businesses
First things first, your insurance needs may differ based on many factors, including your industry, specialty, and assets. The most common business insurance policies you might want to consider include:
- General liability insurance. This insurance type covers liability lawsuits over third-party injuries, property damage, or advertising injuries like copyright infringement or defamation.
- Commercial property insurance. It pays to replace or repair lost, stolen, or damaged business property like your offices, manufacturing site, equipment, etc.
- Business owners’ policy. This policy combines commercial property insurance with general liability insurance and is usually cheaper than when purchased separately.
- Workers’ compensation insurance. This insurance pays employees’ medical expenses and lost wages for work-related injuries or illnesses.
- Commercial auto insurance. This covers the medical expenses, property damage, and all legal bills if your business vehicle causes an accident on the road.
Check What Insurance May Be Legally Required for Your Business
Purchasing a particular business insurance policy may not just be a good investment for your business, but it may be a necessity. Depending on your state, industry, clients, or lenders, you may be required to get specific coverage.
For instance, if you’re renting a commercial space, your landlord may demand you to get a general liability policy to cover potential lawsuits from third parties over claims of property damage or bodily injury.
Know Your Industry’s Risks
Each industry is different, and so are the risks to your business. For instance, restaurant owners should be insured if a guest becomes sick after eating a meal at their restaurant. Or, the owners of masonry businesses should look into obtaining some of the specialized great mason insurance options out there to protect their business if something goes wrong while working on a project or somebody gets hurt while at work.
Whatever industry you’re in, you must carefully evaluate all potential risks that you’re likely to face in your industry and buy insurance to protect your business against them.
Consider Your Deductibles
Most small business insurance policies include a deductible, which is the amount you’ll be responsible for paying before your selected policy kicks in to help cover a loss. After you pay the deductible, your insurance provider will cover the rest of the claim amount, up to the policy limit.
The higher your deductible is, the lower your premiums will be, which might tempt you to choose a policy with high deductibles. Nevertheless, you need to ensure that your company can afford to pay the deductible should you ever need to file a claim. For that reason, while selecting your business insurance, it’s essential to have this in mind when choosing your deductibles.
Prioritize Coverage Over Cost
As soon as most business owners realize the type of business insurance they need for their company, usually, the next question they have is about the cost of the policy they need because when the budget is tight, every penny counts. Nevertheless, it’s essential to understand that, while small business insurance is an additional expense, it is critical in protecting your business from severe financial damage.
While it may be tempting to select the cheapest option you can find to save some money on your premiums, keep in mind that it may cost you more in the long run. More affordable insurance policies are priced in that manner for a reason, as they may offer minimal coverage that will leave your business vulnerable to common risks. For that reason, we recommend that you buy only the coverage that your budget allows while also covering your eventual losses and protecting your business from bad scenarios.
Getting business insurance is one of a businessman’s most intelligent decisions to better their business, especially when speaking about small enterprises. Assess all risks that your company can be exposed to and select the type of insurance that suits your requirements the most.