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Business Insurance: When You Should Buy, Companies, Prices, and More

If you’re a new business owner, you’ve likely discovered that there are hundreds of different things thatgo into running a company. One of the things you may have never once considered is businessinsurance. Business insurance could be integral in protecting your organization from substantial losses. Ifyou have not yet considered business insurance, you should begin doing so immediately.

However, when you go about doing so, it’s easy to become overwhelmed, especially if you are notfamiliar with the process. Fortunately, this guide is here to help. We’ve taken the time to compile aguide for everything you need to know about policy plans, business insurance costs, and when youshould buy. This article should provide to be incredibly helpful when evaluating insurance needs.

What is Business Insurance?

Business insurance is as the name indicates. It is insurance that protects companies from losses that mayoccur throughout standard day-to-day operations. Business insurance is a rather broad term, as itencompasses many different types of policies. Although companies could purchase a general businesspolicy, the title “Business Insurance” also represents coverage for things such as:

  • Property Damage
  • Employee-Related Risks
  • Legal Liability

Large corporations generally have teams set aside strictly to handle their insurance needs. Aconversation about business insurance is likely most beneficial to the owners of small companies. Theseare the individuals who most need to concern themselves with mitigating risk and protecting theirassets. Failure to evaluate risk properly could leave them exposed personally.Small business owners would be wise to contact an insurance broker who is both licensed andexperienced. Insurance brokers can help small business owners determine how much coverage they’llneed to protect their business, weighing things such where the company operates, how manyemployees they have, the type of activity in which they engage, and debts.

Business Insurance Costs

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Purchasing an insurance policy to protect your business is a lot different than buying a box of paper or acomputer monitor. The prices for those goods are tangible. You could look them up online quickly, andcan buy them in a store. Business insurance costs are a bit more complicated, as companies will weighnumerous factors when deciding upon the value of your policy.Keeping in mind that various factors will determine the cost of your policy, there are a few statisticsonline that could give small business owners an indication of how much they can expect to pay for aplan. According to Insureon, the average cost of annual small business insurance is a bit less than $1,300per year. The median price of an insurance plan is a bit less than $600 per year.If you own a small business with a few employees, you may concern yourself more with the median costof a policy. When the average price of a system is higher than the median values, it means there are afew outliers with large insurance plans. If you are in a low-risk business and only have a few employees,your business insurance cost should be no more than a few hundred dollars per year.Businesses in this position found that General Liability Insurance provided them with enough protection.If you need to add more specific plans, such as Worker’s Compensation or other similar policies, you canexpect your costs to increase. However, the costs of insurance are much less than the price of anaccident in which you’re liable.Another factor that goes into determining the cost of your policy is the limit. An insurance adjuster willevaluate your business and recommend the ceiling which you should purchase. For instance, if youchoose a plan that has a $250,000 threshold, your business is protected against $250,000 in damages.Anything that exceeds this would come from the business’ assets.The higher the limit on your policy, the more your plan will cost annually. We do not recommendchoosing a policy limit that is below your insurance adjuster’s recommendations. Otherwise, you leaveyourself susceptible to the same risk that you are trying to mitigate. Choosing a higher limit may not benecessary, but some owners find more comfort in doing so.One other key factor to consider is the deductible on your policy. An insurance deductible is an amountthat your business must pay before coverage kicks in. A lower deductible could result in a higher policycost, and vice versa. That means that choosing a policy with a higher deductible could result in theannual value of your coverage decreasing.

When is the Right Time to Buy Business Insurance?

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If you are a small business owner who has yet to purchase business insurance, you may find yourselfwondering if its necessary. This could especially true if you have been in business for a few years andfound that you have never needed such insurance. If you’ve made it this long, why would you beginspending money on a policy now?Even if you are a low-risk company who has never needed general business insurance, we stillrecommend that you contact an insurance broker immediately. You can secure a policy with low limitsso that you are not breaking the bank but remain protected. Have you ever heard of the saying, “If youplay with fire, you’re going to get burned?” This applies to businesses without insurance.Furthermore, there are a few key factors, indicators, or significant events that could indicate a need forbusiness insurance. For instance, if your company has recently begun leasing commercial space, youshould strongly consider purchasing a business insurance policy. That’s because the entire building issusceptible to risk. Below, you’ll find the key triggers indicating that you should buy insurance.

The Business Begins Leasing a Building

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For instance, if you sell merchandise, your employees put themselves at risk every time they go to thestockroom to load or unload goods. Also, the public spaces of your building are also a tremendous risk.While you can trust your employees, you never know who is going to come to your store. All it takes isone customer to slip on a rainy day to set your business back for years.Before purchasing your new insurance policy, you should talk to your landlord to see what type ofinsurance they have. Many business owners find that their landlord has insurance to cover the structuralintegrity of the building, such as in the case of a thunderstorm or a fire. But the landlord likely won’tprotect you from what happens inside the building.

The Business Begins Working with a Large Corporation

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If you’re a business owner who finally had a big breakthrough because you landed a big client, thencongratulations! This is undoubtedly an exciting time, as years of hard work feel as though they’vefinally paid off. However, there are now some other things you’ll need to consider that you may nothave thought about previously.One of those things is the fact that you’ll now need to purchase business insurance. Often, largecorporations require their clients to proof of business insurance. If you’re able to provide a certificate ofinsurance during negotiations, it could speed the process along and make for an excellent firstimpression on your new client. An insurance program also lends credibility to your company.This is also a time in which business owners will want to speak with an agent. Large corporations standto lose a lot if they do not protect themselves from liability, which is why they require you to haveinsurance in the first place. They’ll also likely specify which policies you must carry. An agent will makesure you meet all requirements.

The Business Hires Employees

job

Another reliable indicator that you need to purchase business insurance is that you’ve hired employees.As integral as employees are to a business’ success, they could also turn into a company’s downfall ifowners do not accept the fact that employees bring upon a ton of risk. That’s because owners are liablefor any injuries that occur while on the job.Owners will most likely want to look into Worker’s Compensation Insurance for their employees. Thisinsurance would cover an employee’s replacement wages, medical bills, and disability benefits if youremployee were injured while working for you. Take, for instance, someone who is in the stockroom androlls their ankle.What may seem like a minor injury could see the costs skyrocket quickly. The employee will likely haveto go to the hospital to see a doctor. While there, they may need screenings such as an x-ray or MRI.Then, they may require a boot to stabilize the ankle. If the injury is severe enough, they will needphysical therapy to rehab from the injury.Because the employee is healing, the doctor may have informed the person to not walk for a couple ofweeks. The employee then can’t work, which mean the employer is also responsible for paying thewages from the time that they missed. These costs could add up quickly without the aid of insurance.They could end up crippling a business and its owners.

Driving is a Part of Business Operations

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Business insurance does not cover employees on their commute to or from work in a personal vehicle.However, business owners will want to purchase insurance if there is a company car or if the businesssends its employees to various locations for meetings or conferences. Commercial Auto Insurance is atype of insurance policy that will protect all those who drive on behalf of the company.If you are renting a car for your business, the insurance that the rental agency offers is not an extensivepolicy. It merely protects you from any damages that occurred to the vehicle. But, a rental agency’sinsurance policy will not protect against injuries suffered as a result of the accident. Look for a Hired &Non-Owned Auto Insurance Policy to help keep everyone safe.

The Business Begins Online Operations

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One of the last significant events that would cause a business to purchase insurance is when they launcha website. Many business owners don’t know how much they put themselves at risk when opening awebsite. For instance, many owners may post un-original content on their sites, such as a song orgraphic. When doing so, they fail to look into whether the material is copyrighted.General Business Insurance should protect companies against any advertising liabilities. Additionally,companies will want to consider something like Cyber Liability Insurance if they have an e-commercesection of their website that requires customers to enter credit card information or other sensitive datasuch as an address.

Where to Purchase General Business Insurance?

swap card

Now that you’ve determined it’s in your company’s best interest to purchase an insurance plan, you mayfind yourself wondering which agency is best for your organization. An internet search of “BusinessInsurance” reveals options from dozens of companies, such as Progressive or Geico. Our best advicewould be to browse and shop around.The insurance that you purchase should not be an impulse buy. Instead, it should be a calculateddecision that you make after extensive research. First and foremost, you want to get the best rate foryour business. Shop around to see which insurance agencies offer the best deal for your company’sneeds. We believe that you’ll find most of the agencies are within the same range.From there, you’ll want to look into the reputation of the agency. Owners will wish to make sure that ifthey must enact their insurance coverage, the agency will have their back and be there for assistanceand guidance. Some business owners may find it worth their while to pay a little bit more money peryear if it means dealing with an insurance agent who is reputable.We would also recommend that you look locally as well. Many reputable insurance agencies do notoperate on a national level. If you are a small business owner and you only exist in one particular townor state, you may find that you’ll receive much better customer service when dealing with a localagency. Again, do your research to learn more and weigh your options.

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