Congratulations! You are officially a business owner! Now what?
Whether you have built it from the ground-up or purchased a fully-operational company, you will want to protect your investment with business insurance. But with all the different companies, policies, and endorsements, how do you know where to begin? Follow these tips from the Small Business Administration to help you choose the right coverage for you and your business.
Understand Your Risks
Before any insurance company will agree to insure your business, they will first evaluate your risks and agree or not agree to insure those risks. This process is called underwriting. Understanding your own risks will help you understand your insurance policy. For instance, will alcohol be served or sold at your business? Will employees make deliveries using their own or a company vehicle? Each of these scenarios is classified as a risk, and, as such, would need a specific policy to insure it.
Know Your Options
As with any purchase, make sure to “shop around” and get a few different quotes before buying. While it might be tempting to opt for the cheapest insurance, try to focus instead on choosing coverage that will meet all of your business needs. In the event of a catastrophe, being underinsured could leave you financially devastated.
Opt for a Business Owners Policy
While it is possible to buy a separate policy for all your business insurance needs, it is usually more economical to purchase a business owners policy. A typical business owners policy will combine property, general liability, and business interruption coverage into one package.
Consider Commercial Auto Coverage
If you have one or more vehicles used for business, consider commercial auto insurance for protection against claims for legal liability. It can be extended to provide coverage for damages to those vehicles that you own or are operated by your business, protecting not only your vehicles, but your employees, products or equipment.
Find an Independent Agent
Independent agents are your most valuable resource when it comes to choosing and understanding your insurance coverage. While your head is buzzing with thoughts of inventory, sales, and staffing issues, an independent agent is an insurance professional who will ensure that you get the best coverage for your business. Additionally, he or she can advise of specific endorsements needed to insure the risks unique to your business, an important detail that might be overlooked if you purchase directly from a carrier.
Reevaluate Every Year
As your business, staff, and products grow, your coverage will need to as well. Reevaluate your insurance policy every year to ensure that your coverage meets your current needs.