A Guide to Choosing Commercial Insurance for Businesses

As important as insurance is for business establishments, 75 percent of US businesses still remain underinsured by at least 40 percent. It’s a shocking statistic, given the numerous risks a business may face at any given time.

The wrong decisions about business insurance can come back to haunt you when the unexpected happens. Up to 40 percent of businesses are unprepared to operate after a disaster shuts them down. Proper insurance would help these businesses survive.

For all entrepreneurs, a full understanding of choosing commercial insurance is essential to staying adequately insured at all times. So, where do you start? Read on to find out what to do when choosing insurance for your business.

Do Research On How Much Insurance You’re Required To Have

Not every small business in the US requires commercial insurance to operate. However, some states and industries require that you purchase insurance to be allowed to operate. Find out the requirements in your state to ensure that you’re compliant.

In most states, it’s a requirement that you carry workers’ comp insurance if you have employees. Landlords may also require that you have general liability insurance if you’re renting commercial space to cover property damage or injuries that happen on-site.

Take the time to research the state laws as well as industry regulations regarding insurance. This includes the minimum amount of coverage the law requires for your business.

Determine The Risks For Which You Need Insurance

Different industries have different challenges and risks. Take your time first to understand the different types of business insurance available and what each is designed to do. Next, find out about any options for insurance that are specifically designed for businesses like yours.

For instance, if you plan to open a convenience store, you may want to get coverage for property loss, given that these types of businesses are lucrative targets of thefts.

Note that it’s not just your industry that you need to think about. Consider your company’s location as well and the risks that result from it. For instance, if you live in a location that’s prone to natural disasters like flood, you may want to consider coverage for that as well.

After making a careful assessment of your risk, determine whether you need extra coverage besides general liability and property insurance. Many businesses find that they need to insure against data breaches, for instance or employment practices.

Work With A Knowledgeable Agent

Issues to do with commercial insurance can get confusing. You may find that you still have some questions after you’ve done your research on the matter. This is the reason it’s always a good idea to work with a reliable independent insurance agent.

An independent insurance agent will be able to guide you in choosing the right policy for your business. They can help explain each policy carefully so that you know whether you’re making the right choice.

Your independent insurance agent can also prove helpful when it comes to comparing insurance costs. They can help find unbeatable insurance deals for you, so you end up saving in the process.

When choosing an insurance agent, it’s best to opt for an independent agent instead of a captive agent. An independent agent will shop around at different providers to find you an insurance policy that best fits your company.

Consider Taking A Bigger Policy Than You Need

As we pointed out earlier, the vast majority of businesses err on the side of being underinsured. Many of these businesses are looking for areas where they can cut costs. Your insurance policy should never be one of these areas.

Sure, a cheaper policy seems appealing at the moment, but that’ll hardly be the case in the long run. These policies tend to have higher deductibles, and their coverage is often lower and less thorough. In case something goes wrong, you have to pay a fortune out of your pocket to help rectify it.

Don’t make the mistake of underestimating the financial burden of property damage, business lawsuits, and other claims. Follow your insurance agent’s guidance to understand how much insurance you need.

Ultimately, paying a little more every month for a solid policy from a trusted commercial insurance provider pays a lot of dividends.

Find A Policy That’ll Grow With Your Business

As circumstances in your business change, so will your insurance coverage needs. With time, you may need to expand your range of products or services, hire more employees, or open new locations. You may discover that the insurance you purchased at the start of your business is no longer enough.

For this reason, it’s always best to look for a policy that’s flexible enough to allow changes as your business grows. Consider from the outset how your needs may change and shop for a policy that accommodates these changes.

Read The Fine Print Before Signing The Contract

Many entrepreneurs never take the time to read all the details of the policy, which is a big mistake. If you’re going to be stuck with a policy for a considerable amount of time, it only makes sense to want to understand all the insurance terms and conditions before you sign on the dotted line.

Review with your insurance agent the limits, exclusions, deductibles, and premiums of a policy before you make a final decision. You want to be aware of any gaps in the policy before it’s too late.

Choosing Commercial Insurance Shouldn’t Be A Pain

As a responsible business owner, you need to take the steps necessary to protect your business from potential risks. One of the most practical ways to do so is by choosing commercial insurance that’s both suitable and adequate for your establishment. The guidelines we’ve shared above should prove helpful as you plan ahead.

Are you ready to purchase the right commercial insurance policy for your business? Please contact us today to learn how we can help.