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Buying the right kind of insurance for your company is critical to the safety of your business. With so many different business insurance products in the market, how do you choose the one that would be best for your business? Here are some tips to help you make the right decision.
Necessary Policies
These are business insurance policies that you must get. Call them the essentials for keeping your company safe.
If you have employees, then this policy is a must-have. While many states require you to have this coverage (depending on your employee count), even if it is not required by law in your state, it is best to have this policy.
This policy provides medical coverage, rehabilitation and wages lost for employees who are injured or taken ill while on the job. The dependents will also get death benefits.
This policy protects your against claims of injury or damage to customers, suppliers or any others while on your business premises. Not many small business owners buy this insurance policy, but this is the one that can protect from getting wiped out in an expensive lawsuit.
It is also advisable to ensure that the kind of Liability insurance your buy protects your personal assets so that you do not lose everything you own in case you are sued.
This is a policy that you need if you have a lot of inventory, equipment or furnishings in your business. If you do not have a lot of property, then this type of insurance is one that you can forego.
However, you do need to keep in mind that you will need this type of insurance if you’re looking for financing. Furthermore, such type of a policy will not cover you for damages due to earthquakes, flooding, utility failures, boiler issues, etc. So, if you do opt for this policy, ensure that it includes protection against these issues as a rider.
Furthermore, it would be a good idea to ensure that the insurance you do purchase is enough to cover the cost of replacing your property – especially if that property is critical to your business.
This is a combination of the other policies and it is targeted at small businesses with revenues of up to $3 million. It is possible for bigger companies to get this type of insurance, though it isn’t the norm.
The Business Owners’ Policy combines Property Insurance and General Liability Insurance, and many insurers also add Business Interruption Insurance to the package. This makes this policy a cheaper option than buying individual plans.
Other Insurance Policies You May Need
If you are a growing company, then there may be other types of insurance policies you will need.
If you run a business in which you own or rent company vehicles or you use your personal vehicle for your business, then this is one type of insurance you should consider.
Also called Employment Practice Liability Insurance, this policy protects you from being sued by your employees. If your employee feels that they have been unfairly treated by you, or they have sustained injuries or become ill while working for your company, then they could sue you for damages.
This insurance offers you protection in the form of paying for legal fees and settlements. However, it is wise to remember that if you have a history of employee suits, then you could be uninsurable.
There are also policies that you can buy for special circumstances:
This policy is also called the Errors and Omissions Insurance. This is a great policy to have if what you sell is a service. So, if you’re a financial advisor, a physician or even a lawyer, then this is a policy that you should buy.
This is an insurance coverage for that key member of your company without whom you could suffer huge business losses. In a small business, the owner would be that person. But in partnerships, it could be one of the partners. In case it is a partnership, then this policy can be used to buy out the other partner (who can no longer continue to contribute to the business due to injury or illness) or their heirs. In companies where an employee is invaluable because of their highly specialized skills, then this insurance coverage can help you with the cost of replacement and support the business while this replacement is found and trained.
This is a policy that usually is needed by companies that have stakeholders and shareholders. In the last 10 years or so, a growing number of stakeholders and shareholders have starting suing company management.
Where Should You Buy Your Business Insurance Policy?
Now that you know a little bit more about the kinds of business insurance policies available in the market, here are a few tips on how to buy those policies.
An insurance agent is usually employed by an insurance company, so the policies you may be offered will belong to that insurer. A broker, on the other hand, can offer you a selection of insurance products from various companies.
Whichever one you choose, make sure that they are professional enough and trustworthy to tell you the pros and cons of each product.
Sometimes, it is best to find an agent or broker who specializes in your industry. This way, they will know exactly the kind of insurance policies that would work best for your business.
The best way to shop around for business insurance today is online, as long as you trust the resource. There are plenty of websites out there, both of insurance companies and of comparison websites that can help you find the best business insurance policy for your requirements and specific business needs.
