So many things should be taken into account when starting a business, and one of these is buying business insurance. It is a wise investment that protects you from significant financial losses due to claims. If the world of business can be overwhelming to some, the same holds true when it comes to insurance.
With so many options and factors to consider, how can you ensure that you’re getting adequate coverage for your business? To help you narrow down the selection process, here are the top questions that you need to ask when purchasing business insurance:
- What are the different insurance products I need for my business? Regardless of industry, businesses differ in the products or services they offer, where they are based, their customers, etc. To know which policies to buy, it is important to identify the different business aspects. In this way, you will be able to assess the potential risks and better understand the different policies needed to protect the business from those risks.
In most cases, you will need General Liability coverage to provide protection from
financial losses against claims of bodily injury or damage to property. Other business insurance products that you may need are a workers compensation policy, business owner’s policy, and errors and omissions insurance.
- What are the payment limits of my policy? Policy limits are other factors to take into account when buying insurance. Depending on the size of your operations, potential risks, and history of claims, your policy limit can be an aggregate limit or the maximum amount that the insurance will pay in a year for all the claims, or per-occurrence limit, which refers to the maximum amount that your policy will pay for a claim.
- Does the location of the business matter? Do you have your own space or do you lease? Whether you bought an office space or rent commercial space to accommodate business expansion, it is crucial to purchase Commercial Property insurance. This provides coverage to the structure or building where you operate. If you’re leasing an office, this is a requirement by landlords or mortgage companies.
- How can I inform my insurer about a claim? Time is of the essence when an untoward incident happens in the business. Make sure to inform the claims department of your insurance provider as soon as possible. It is important to resolve the problem sooner, giving the insurer enough time to assess the amount that you need to receive and when you can have it.
- Do you use any vehicle for your day-to-day business activities? Some people think that their existing auto coverage will also provide protection in case there’s an accident when they’re driving their vehicle for work. The truth is, your auto insurance may even have exclusions for claims related to the business. When you or your employees drive for a work-related trip, whether using a company vehicle or their own car, they need to have either Commercial Auto insurance or hired or non-owned auto insurance.
- Do you handle credit card transactions? More and more businesses take credit card payments. This involves keeping customer data. Of course, you need to keep your customers secure and protected. That’s why you need to purchase Cyber Liability insurance. It protects your business against claims related to a data breach. In this digital age, data privacy and protection has become even more crucial, so make the security of your customers’ data a priority by having proper coverage.
- Do you run a small business? The size of your business plays a big role in determining the insurance products that you will need. For instance, if you own a small business, consider purchasing Commercial General Liability insurance. This coverage will protect your business against a lawsuit involving bodily injury or damage to property. You may also need Professional Liability coverage that protects your business against financial losses due to a claim related to an error in consultation or professional advice.
- Can I save some cash on business insurance? Absolutely! One way to save money on coverage is by bundling policies. Ask your insurance agent about the different products that you can combine into a bundle to save on premiums. Another way to save some cash is by knowing the potential risks and taking steps to minimize them. How? Build and maintain a work environment that is safe, not only for employees but also for clients and customers. Determine if your company is located in an area that’s prone to flooding. Make sure that a comprehensive set of rules and regulations is in place for employees and external parties to avoid any misunderstanding and inconvenience later on.
- What are the factors that have an impact on the amount of my premiums? Aside from the different kinds of insurance products available nowadays, there are several aspects of the business that you need to consider as these have an impact on the cost of your insurance. One of these is the type of business or industry since some jobs come with specific potential risks. Another factor is the number of employees. In general, the more workers you have, the higher the cost of the Workers Compensation insurance will be. Also, your mode of payment (monthly or lump sum) affects the cost of your premiums.
- Do you employ individuals? It is important to protect your employees as well, so make sure to purchase Workers Compensation insurance. Besides, it is most likely required by the state where your business is located – except Texas. This protects the business against financial losses due to claims of bodily injury or illness sustained by an employee on the job. You may also want to buy Employment Practices Liability insurance for protection against lawsuits related to harassment or discrimination.
These are some of the common questions business owners ask when buying insurance. However, it is still best to seek professional guidance through a reputable insurance provider. They will be able to assess the potential risks in your business or industry and come up with recommendations on the types of coverage that will suit your needs.
By Pascale Abou Moussa CoverWallet
Pascale Abou Moussa is on the marketing team at CoverWallet, a tech company that makes it easy for businesses to understand, buy, and manage insurance - all online and in minutes. The company provides everything from general liability and workers compensation to directors & officers and commercial auto, and everything in between.