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Business Insurance Tips
1. The primary factor in purchasing business
insurance is understanding what type of insurance is needed for your
business and how much is needed. All too often business owners buy
insurance policies that are not satisfactory for their needs. The
business either has too much insurance or not enough. A good way to
choose insurance is to talk to an insurance representative and go
through possible scenarios for needing insurance. Also, you should do a
risk analysis each year to determine the assets and the liabilities of
your business and which of those are important enough or expensive
enough to be insured.
2. Doing a risk analysis of your business will help you choose a good
insurance company and a good business insurance policy. When you do a
risk analysis, you should consider all aspects of your business:
anything from your property and your building to your equipment and even
key personnel. Depending on the type of business you run, you should
consider insuring not only equipment but also insuring your equipment
against employee theft. You should always consider three other types of
insurance that may be mandatory depending on the insurance company and
federal or state law: worker’s compensation, unemployment, and employee
benefits.
3. When you start a business, you should purchase insurance as quickly
as you can to protect yourself and your assets against accidents or
damages against your company. There are many ways that you can reduce
risks so that you do not have to purchase certain types of insurance:
you can install locks or security systems, you can decrease the chance
of a liability suit from people injuring themselves on your property by
either fencing off your property or clearing it of any potential risks,
and you can thoroughly screen employees to prevent as much employee
theft as possible.
4. Make sure your insurance company or your insurance firm has the
correct historical information about your business. In order to receive
lower premiums, it is necessary for your business to provide your
insurance company with a complete history of your business. It is also a
good idea to check the insurance company’s file on your company from
time to time for inaccuracies. It would be unfortunate for an incident
to occur and a claim to be put on your history that would raise your
rates when the incident did not happen and the claim was filed
accidentally.
5. Develop a risk management plan. A good risk management plan can and
should help reduce business and liability insurance premiums. Many
insurance companies require some sort of risk management program; they
do this to help protect their interests, which will in turn lower the
premium price. Many brokers within the insurance company can help their
client or company piece together a good risk management plan. Good risk
management plans eliminate unnecessary risks from a business (either
personnel, product, equipment, or property) and reduce the frequency or
severity of certain risks by taking preventative measures (such as
installing security systems).
6. As you are shopping around for business insurance, look for packaged
deals. Many insurance companies offer small- or medium-sized business
insurance policies. These policies combine a number of coverages
together under one policy that offers basic protection. Generally these
policies include property insurance, business interruption insurance,
liability protection, crime insurance, and auto insurance for company
cars. These policies are much cheaper than purchasing individual
policies covering all these different types of coverage. However, these
policies do not usually include employee benefits as these policies
cater to more upstart businesses where benefits would not yet be
offered.
7. When you are purchasing business insurance, you should understand
business law and specifically the state and local laws of the area where
you are starting your business. It is true that federal law is the same
concerning everyone and every business, but when purchasing insurance, a
business owner must take into account all state and local laws. This can
be difficult due to the constant change of state and local laws. The
easiest way to avoid any conflicts with the government is to find an
insurance firm that has offices in or near your locality. Insurance
agents should be well versed in the business laws governing their area
and can help provide you with the necessary insurance.
8. One way to make your workers more efficient and your business more
effective is to offer a benefits package. Currently, benefits packages
are becoming smaller and smaller, but you should consider offering one
that is consistent with the size and scope of your business: smaller
companies should provide smaller packages with fewer options to choose
from while larger companies consisting of more employees should offer
multiple options and plans. By picking a plan suited your company, you
can boost morale and increase work production. Employees will take pride
in their work and will want to be associated with your company because
they will feel like you value their services enough to offer them
benefits. They will work harder and invest their time, talents, and
interest into your company.
9. Small, home-based businesses can fall in between the cracks of
business insurance: they are not yet big enough to warrant the cost of
business insurance, but they have equipment and such that should be
insured. One way for small, home-based businesses to insure their
equipment without incurring the cost or the unneeded protection of
business insurance is to add a rider onto their homeowner’s policy.
Because the business is home-based, company owners can insure the
equipment that is being used for their company that is inside their
home. Homeowners can also increase their liability insurance if they are
going to have increased foot traffic into and out of their home because
of their business.
10. When you are purchasing business insurance, you should consider
purchasing employment practices liability insurance. This insurance
protects you as a business owner from employee’s claims that their
rights have been violated. As the number of these suits have been rising
and the amount award to the employees has also been rising, business
owners should seriously consider this type of insurance, especially if
the business is growing and is hiring a greater number of employees. |
