Buying business insurance can be a tricky maze to navigate for those of us without direct knowledge of the industry. However, having the right insurance is becoming increasingly important. Here, we consider the five questions you absolutely must ask your business insurance company before purchasing any insurance policy for your business
How Much Insurance Do I Need?
You may think car insurance is unnecessary if you don’t have a company car, but do you ever use your personal car for business-related tasks? If you do and you get in an accident, you may not be covered under your personal auto policy. In terms of how much insurance you need, remember that insurance helps you deal with the unexpected. If you’re considering liability insurance, evaluate how much money your business may need to deal with different types of unexpected lawsuits.
What Does the Plan Cover?
Be sure to read the small print and consider what each policy covers. Ask your insurance representative to explain the policy to you, and don’t be afraid to take your time to mull things over and consider other insurance providers as well. If you have colleagues and peers with similar types of insurance, ask them for their recommendations. They may be able to help you in terms of what has worked for them (your local Chamber of Commerce is a great place to start).
How Much Is the Deductible?
This question is of particular interest because the deductible is the amount the insurance company won’t pay in case of a claim. Keep in mind that a lower deductible is often accompanied by higher premiums, that is, the amount you pay for the policy itself. So, if you’re considering a company health insurance policy, for example, look for the best balance between the premium and the deductible.
What Are My Payment Options?
When considering deductibles and premiums, it’s also wise to ask your insurance agent about the different payment options available. Of course the insurance company would prefer you pay the entire premium up front. However, many companies offer monthly payments or even payments every six months. You may pay somewhat more for more frequent payment installments, but it could help you with long-term budget planning.
What Are the Coverage Limits?
Finally, before deciding on an insurance policy, ask specific questions regarding the coverage limits. For health insurance, what doctors can you or your employees see? For auto insurance, will damaged parts be replaced using only original parts? Does the company set a limit to the number of claims each year?
These questions are by no means comprehensive, but they’re a great place to start a conversation with your insurance agent as you begin to search for the best business insurance policy for you.