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If you are thinking about starting and running a small business, then there are several new risks you need to be aware of. Potential injuries in the workplace, staff employment issues, or even financial losses can all be covered by insurance for small businesses.
Small business owners need insurance coverage to protect them against risks and financial loss.
Before choosing a specific policy, small business owners need to research to determine the types of insurance they need. The best kind of insurance policy is different for every business type.
Small business insurance is crucial to ensure you are protecting your business and personal assets in the event of an unexpected accident, financial setback, or problem.
Here are six steps to help you ensure you get the correct insurance for your new business.
Six Steps to Get The Right Insurance For Your New Small Business
1. Do Your Research
Have you ever bought something that required assembly, like a piece of furniture, and you ignored the instructions? If you have, you probably know from that experience that trying to figure it all out yourself is a lot slower and more complex than following instructions.
Learning about the types of business insurance is like reading the instructions before beginning.
In as little as 20-30 minutes of research, you could save a lot of time and money.
You don’t have to become an expert, but a basic understanding of the coverages, regardless of business tenure, will help you make better decisions with or without professional assistance.
2. Assess Your Business
Each small business has unique needs. Once you’re familiar with the primary commercial insurance coverages, you should investigate which ones best fit your business.
For example, a home-based consultant may carry a basic general liability policy. However, a consultant with an office that customers visit would be better served by a more comprehensive business owner’s policy, often referred to as a BOP.
Although both businesses practice the same profession, their operations’ details will vary, which directly affects their insurance needs.
It’s essential to know the unique problems your business will face ahead of time and match their insurances to them.
3. Find a Small Business Insurance Broker
To get the best advice, look into insurance brokers in your local area specializing in small businesses.
You can do some research online to find local brokers or even reach out to other small business owners and ask for recommendations.
When you’ve found an insurance broker you’re comfortable with, set up a time for an in-person meeting or an online meeting.
4. Get a Quote
Getting an accurate small business insurance quote shouldn’t be difficult, especially if you’ve done some research or worked with an insurance broker.
Working with an insurance broker, you can get a customized quote with the help of a licensed business insurance expert. They’ll answer your questions and provide you with a quote that fits your budget for your new business.
5. Review The Policy and Purchase
You should always understand your insurance quote and review it for accuracy, even if you’re ready to begin coverage immediately.
You can request a copy of your quote from your insurance provider and either review it with your agent or request a follow-up call from us.
When your insurance agent ‘binds’ a policy, it means that he or she, as a representative of the insurance company, confirms that coverage is in place.
Proof of insurance can typically be sent immediately once you pay for coverage, and changes to your policy can be made anytime throughout the policy period.
6. Review Policies at Renewal
When you are new in business, a lot can happen in a year.
Because of the changes and evolution of your business, a quick reassessment of your business policy at renewal time will allow you to make any modifications to match the current state of your business.
There are several reasons for adjusting your small business insurance policy may include:
Purchase or sale of commercial property: if you own commercial property, you should have property insurance, which is typically part of a BOP.
Hiring employees: all businesses that have employees require workers’ compensation coverage. This type of insurance will provide benefits to employees who suffer work-related injuries or illnesses. Specifically, workers’ compensation insurance helps pay for medical care and wages from lost work time and more.
Increased business risk: increasing coverage for your business is a good idea if you become involved in higher-risk projects. For example, a general contractor who increases his client base might want to improve his liability coverage to accommodate the increased risk.
Downsizing: in certain situations (such as over the past year dealing with COVID shutdowns), your business may have shrunk in size. In this instance, you only need to pay for the insurance that you need. If your company had sold assets or downsized employees, you might be able to remove unnecessary coverage.