A Guide to Buying Small Business Insurance - Smb Suggestions

A Guide to Buying Small Business Insurance

There are many risks involved in business that can make or break a company. Luckily, by finding the right business insurance, you can limit those risks and conduct operations as usual. Insurance protects your assets. Don’t fret, though! Purchasing business insurance is an easy process once you learn and have determined the type of insurance you need.

Step One: Assess your Risks

The first step is one of the most important as insurance companies will determine the level of risk prior to issuing policies. Known as underwriting, the insurance company will review your application and determine if they can provide part or all of the requested coverage based on the risk within your company. All policies come with a premium and deductible. Therefore, prior to finding an insurance company, assess all risks as best as you can to have an idea of what will be covered.

Step Two: Find a Business Insurance Company

Next, shop around for a business insurance company using the National Federation of Independent Businesses to help you assess risks and find a policy that suits your needs. The amount of coverage and the costs will vary greatly between companies. Some firms specialize in the insurance of specific types of businesses and others can help you find policies for your requirements. In most cases, specialist brokers will find you the best coverage at the best rates. Select two to three insurance companies you are interested in contacting.

Step Three: Preparation for the Consultation

Once you have found a few business insurance companies you are interested in, set up a consultation to receive a quote. Prior to the consultation, it is important you prepare by bringing profits and expenses, the number of employees, type of company, risk and liabilities as well as the property information. When you set up the consultation, ask what type of information they need to make an assessment.

Step Four: Consultation

During the consultation, you want to first discuss potential losses with your agent. This simply indicates what would occur if part of your business was lost. It is best to start with the property and review the ramifications if that location disappeared due to a fire or natural disaster. Review the coverage to replace the building or to protect the business if it is leased. Also, you want to discuss insurance policies that fully replace your equipment, not the depreciated value. Make sure this applies to the policy you are considering.

Also, ask about Worker’s Compensation insurance to protect you from lawsuits in the event an employee is injured on the job. Some states require workers comp by law. Finally, review comprehensive coverage which offers group life insurance, health insurance, and disability insurance. Most companies opt for covering some of these costs.

Step: Five: Assess your Insurance Coverage Annually

The final step is to assess your insurance coverage on an annual basis. As your business grows, the number of liabilities grows with it. Therefore, you want to be protected should some type of disaster occur. If you have expanded operations, replaced equipment or purchased new equipment, you should immediately contact your insurance broker to review required changes to your business and how your coverage will be affected.

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