Starting a new business is a challenge, but finding the right insurance
to protect your business shouldn’t have to be. Consider the following
tips when shopping for business insurance:
Property – Watch Those Limits
Before buying property insurance for your new business, make a list of
all of your property. Be sure to include property whether or not you
think it requires insurance. When you discuss the items on your list
with your insurance company, they can help you best determine what needs
to be insured and how much insurance you need.
It is not uncommon for businesses to have fluctuating property values.
Building and personal property coverage limits must be reviewed frequently
and updated accordingly. Many businesses fail to do this – an omission
that can lead to a penalty for underinsurance, not an additional issue
that your new business wants to address after a claim.
Insurance for Lost Income
A majority of businesses that go bankrupt do so because they lose income
after an insured loss and didn’t have business income protection.
In addition to insuring your property, be sure to insure the life of
your business with a business income policy. For a specified period of
time this policy will pay for a loss of net income and continuing expenses
while your business is recovering from a covered loss. This policy is
a must-have for your new business.
Liability – Understand Limits and Limitations
General liability coverage will pay for defense costs and damages resulting
from claims of bodily injury and/or property damage for which your business
is legally liable. Unlike property insurance, there is no set value for
liability damage – you never know what the claim will be or how severe
the damage. This is why higher limits are always recommended.
Increasing liability limits is not difficult and relatively inexpensive.
A few extra dollars invested in premium, can literally increase your
liability limits by thousands of dollars.
General liability insurance does not cover “Professional Liability” claims.
These are claims for which your business is legally liable, but did not
cause bodily injury or property damage to a third-party. An example of
a professional liability claim would be a CPA’s miscalculation
causing financial damages to a client.
Consider the standard of conduct for your type of business. There may
be a professional liability policy tailored to your industry that is
essential to your business insurance portfolio.
Know the Law
Many requirements for business insurance vary by state law. Before starting
a business contact your state’s insurance department for information
about which types of coverage are mandatory (i.e., worker’s compensation).
Consider a BOP
A business owner’s policy (BOP) combines many essential business
insurance coverage types under one policy. If eligible, your business
will enjoy features through a BOP that are normally purchased individually
and usually have higher premiums. Such features include replacement cost,
business income and employee dishonesty coverage as well as higher limits
of liability.
Learn more about business insurance from NetQuote – get your
free business insurance quotes today.
