In this complex world of business, companies have access to a wide range of insurance coverage to protect themselves against various risks. Operating your business without proper insurance is a very risky proposition as one catastrophic event or law suit can easily wipe out your business before you even have a chance to recover.
Why Do You Need Business Insurance?
In general, business insurance protects your business from losses arising from unforeseen incidents and helps you keep running it without interruption. There are several types of insurance available for businesses to protect them against potential risks.
The most common types of commercial insurance are property, liability and workers’ compensation where property insurance covers damages to your business property; liability insurance covers damages to third parties; and workers’ compensation insurance covers job-related injuries to your employees.
Depending on the type of business you are in, you may also want to get specialized coverage to protect your business against certain risks such as business interruption insurance, product liability insurance, machinery insurance, credit risk insurance, cyber insurance and so on.
Naturally, you have to evaluate your insurance needs based on the potential risks you are likely to face in the future, which can vary depending on the type of environment your business operates in.
Concerns About Insurance Costs
The main concern many business owners have about getting business insurance is the cost and the amount of coverage they will be receiving. If you are not sure about these matters, it is best to consult an experienced financial planning consultant in order to help you to figure out how much you can actually afford to spend on insurance for your business, as well how paying for these policies will affect other operations of your company.
As a business owner, you’ll also want to know whether or not you can pay for business insurance and still be able to supplement your employee’s retirement accounts, as well as your own. If you have opted to offer your employees a supplemental retirement plan, you need to make sure that the amount of money in the business account that is used for this purpose continues to grow, and that you are prepared to compensate those who will be retiring soon. And, if something happens to your company that business insurance can cover, you will be able to provide your employees with the benefits they deserve.
How To Choose The Right Insurance Company
Needless to say, getting insurance from a reputable company is the best route to take as you will be dealing with a company that you can trust. However, there are still several factors you should consider when choosing an insurance company such as:
- Examine the quality ratings of the insurance company as published by Moody’s, Standard & Poor’s, Fitch, or AM Best. These ratings indicate the ability of the insurance provider to pay claims and its financial performance as compared to its competitors.
- Check the insurance company’s record for claim refusal where you don’t want to file a claim only to have it denied by the insurance company for some reason which is beyond your control.
- Find out if the premiums and deductibles offered by the insurance company are cost effective for your business.
- Does the insurance company offer discounts on premiums if you purchase multiple policies?
- What kind of complaints has been made against the insurance company in recent years?
- Find out if the company has a local office nearby so you can walk into your insurance agent’s office and speak to a representative if you have questions or want to change your insurance plan for any reason.
Of course, one of the best ways to find a good insurance company is still to talk to your business colleagues for their recommendations.
By having the right insurance coverage, your business can avoid a major financial loss arising from a lawsuit or catastrophic event. Check with your insurance company to find out what types of insurance are advised for your business and get the right insurance coverage without delay.