5 Insurance Tips to Know When Starting Your Business
Risk management is something every business owner needs to tackle early in the business ownership process. Getting the right insurance coverage is one of the most valuable tools available for helping you insulate your business against various financial risks. This guide offers outstanding insurance tips for small businesses designed to help you get your business off the ground and grow it into a successful business.
1. Know the Types of Business Insurance Available
There are many types of insurance available for small businesses, entrepreneurs, and start-ups alike. A few examples of business insurance needs include the following examples.
- General liability insurance
- Cyber liability insurance
- Worker’s compensation insurance
- Commercial auto insurance
- Commercial property insurance
The truth is that your business will likely need much more than the insurance products listed above to provide the solid protection necessary for a well-rounded risk management strategy. Working with a trusted agency can help you select the right policy protection for your risk tolerance.
2. Assess Risk Factors for Your Business and Industry
Different types of businesses in different industries have different needs when it comes to insurance. The reason is simple. You face different risks according to your business and industry. Each business is unique. This fact is true, even for businesses in the same industries.
Because your business is unique, you need to assess the risk factors that are unique to your business as well as those that are common within your industry. For instance, medical service provider businesses need to invest in medical malpractice insurance, while companies that transport hazardous materials may need to invest in a specialized environmental liability insurance policy.
3. Learn What Might Affect Your Insurance Rates
The other thing to consider when purchasing business insurance is factors that affect your premiums. There are many factors to consider. Some may be unchangeable due to the industry your business is in. While you may be able to affect changes that will reduce your business insurance costs in other areas. Common factors to consider include those listed below.
- Business location.
- Business size.
- Business assets.
- The safety record for your business.
- Miles driven daily (for businesses that offer deliveries or have fleets).
- Exposure to hazardous materials.
- Safety of your workplace.
- The legal history of employees.
You can make changes that affect the cost of your insurance protection, like improving property security with exterior lights and alarms to reduce theft, upgrading fire systems to reduce damage if a fire occurs, improving safety measures company-wide, and even having drivers use GPS tracking to monitor and improve safety behind the wheel.
4. Check Your State’s Insurance Requirements
Compliance with state laws related to business insurance is not an option. The fines and penalties for failure to do so are substantial. This is especially true for small businesses and start-ups that may have smaller budgets to work with. Different states have different requirements. Work with a local and trusted agent to get the facts about your state’s commercial insurance requirements for liability coverage and more.
5. Always Overestimate When It Comes to Your Business
Finally, always overestimate your coverage needs when it comes to your business insurance. One lawsuit can be financially devastating for your business, in legal fees alone. The right liability insurance protection can help you weather that financial storm and many, many more along the way.
Getting the right guidance to help you understand your business insurance needs is one of the most important insurance tips for small businesses you can receive. Reach out to one of our agents today to learn more about your individual commercial insurance coverage needs as well as what the laws in your state require for sufficient insurance protection.