As a small business owner, we understand the importance of insuring your investment, the fruits of your hard labor and dedication, which is why we want to ensure you have the best possible insurance plan to guarantee long term success.
There are several types of insurance that pertain to you as a small business owner, and help to protect your assets as well as your health. At InsuranceQuoteOnline our commitment to getting you the right product, at the right price is our number one goal.
While not every business will have exposures in all the areas of insurance recommended for a small business, it is advised that an analysis be done before you select any type of insurance coverage you need, or from which you will benefit the greatest. In addition, certain states will have certain insurance coverage requirements, regulations and limitations that you may be unaware of.
Although each state’s laws are different, the standard is if you have four or more employees, you are required by law to have Workers’ Compensation. Workers’ Compensation will provide partial wage replacement and medical benefits to employees injured on the job while protecting your business from the threat of an employee-initiated civil lawsuit.
Business Property Insurance
This is the second most important type of small business insurance you must have. Within this category, there are three types of insurance coverage.
Small business insurance for your property provides coverage for your building and all its building related content. Included in this are chairs, tables, equipment and desks. Your policy should also provide coverage in the event of an earthquake, a loss of income or a flood (if applicable). An all-risk policy can also cover your computer, all of its software and any valuable records you have.
If you are operating out of your home, by yourself, your home owners or renter’s insurance is simply not enough to protect any professional tools and equipment you may have. Most agencies coverage will not insure property used for business purposes. A small business insurance policy will deal with walk-ins, customers, inventory or tangible products.
Named – Peril Coverage
This protects your small business from losses caused by explosions, smoke and fire.
This offers you a much broader coverage for natural perils, but excludes a few.
This will cover losses to your building and its contents caused by hail, hurricanes and other windstorms.
When it comes to health care, the group option is the best way to go. Offering a group health insurance plan can help you hire and retain the best workers as well as provide valuable protection for yourself and your family. There are special tax incentives available through 2013 for small business that provide group health insurance for their employees.
Some small business will need to use an HMO (Health Maintenance Organization) or an individual policy until they qualify for a small-group policy.
Comprehensive General Liability (CGL)
This type of insurance policy covers third parties for personal and advertising injury, medical expense or medical payments, products and completed operations and general liability for your property. Included in this premium, is Fire Liability Protection. This is beneficial if your landlord’s property is damaged or experiences loss due to your negligence.
As a small business seeking insurance, there are various package policies available from an array of insurance companies.
Some include Business Owners Policy (BOP), Special Multi-Peril Policy (SMP) and individual company designed insurance packages. Many small business insurance companies will design packages in order to meet unique, specialized needs of certain businesses or business types.
Guidelines to Follow When Shopping for Small Business Insurance Coverage
When it comes to shopping for small business insurance, you have every right to be just as discriminating as you would if you were shopping for produce.
Take your time, examine, examine some more and make your selection.
Here is a comprehensive guideline that you can follow to help you make your final selection.
Consider the primary risk you have to be insured.
There are many choices to consider. You can choose coverage for a loss of income, fire or flood damage, liability for your officers and directors, employee injury claims, and more. It is best to discuss these options with your agent because prospective insurance companies may or may not provide the type of policy coverage you need. Agents can also give you expert advice on how to construct a policy that meets your unique needs.
Ensure the policy you’ve chosen meets the primary risks to be insured.
Make sure that your coverage limits are comparable to that of other businesses in your area, within the same industry, and roughly the same size.
Too much coverage=paying an exorbitant premium
Too little coverage=a possible financial bind when you need to cash in on your policy.
Additionally, ensure your deductibles are manageable as well.
Look for any holes in your coverage.
And fill them up! Every insurance company is going to use language in policies that differ slightly from one to another. Be sure to request extended coverage when speaking with an agent.
Consider the policies staying power.
Be sure that your small business insurance policy is actually useful when a claim comes in, so be sure to hold on to it and keep copies in secure places like a safe deposit box.
Be sure to maintain good communication with your skilled insurance professional as they will effectively prepare your business for any contingency that may arise.
Though the average insurance premium can be expensive, you don’t need to break the bank every month to pay it. Here are some things you can do as a small business owner to secure a premium that is comfortably priced with coverage that meets the needs of your business.
Get several quotes
it is okay to shop around until you are satisfied with the price and coverage’s offered in your policy. Be sure to deal with companies that specialize in small business insurance.
Opt for a higher deductible
A higher deductible will allow you to pay less for your policy. Ensure that you do not make the deductible so high that if you need to utilize it, you do not put yourself in a financial bind.
Purchase a package insurance
If you opt for individual coverage, you are going to rack up more fees. A package plan, like the Business Owners Policy (BOP) will save you money on the front end and the life of your policy.
Maintain communication with your agent
As your agent understands your needs, they will be able to find you products that are competitively priced and meet your needs.
Make sure you can prevent losses
Follow your insurers advice to avoid losses which will keep your premium low. Including small things like alarms and sprinklers in the workplace, along with implementing disaster preparation techniques will lower your risk for loss.
The premium basis for general liability insurance depends on the type of business you run. For example, premium stores and manufacturers are based on gross sales; contracting and service-related businesses are based on payroll; apartments are based on the number of units; hotels on gross sales; and office space and property owned and leased to others are typically based on square footage areas.
Business Property Insurance
With Business Property Insurance, your policy should provide coverage for buildings you own or if you lease premises, the landlord should provide the coverage; business personal property, such as tables, desks, chairs and office equipment; loss of income; earthquakes, floods and other natural disasters.
Always keep in mind that an all risk small business insurance policy can be structured to cover all office equipment, including computer hardware and software, as well as important records. As mentioned above, loss of income should always be included in the policy in order to prevent financial ruin to your business.
Business Liability Insurance
This should be designed to provide coverage to third parties for all of the following – personal injury and advertising coverage; fire legal liability, products and completed operations; medical expenses or medical payments; and of course, general liability for your premises. Some forms may exclude products and completed operations and/or personal injury and advertising coverage depending on the services your business provides. If this is the case, you may want to look into professional liability insurance, malpractice or Errors and Omissions policies that may be available for your type of business.
Workers Compensation Insurance
A crucial type of small business insurance for that business’ with employees, workers compensation insurance will be mandatory.
Some worker’s compensation insurance companies also provide additional services such as risk management and loss control services that may be beneficial to your business operation. Such services are especially helpful in keeping down claim costs over the long term.
Other Small Business Insurance
Auto Coverage for company vehicles, such as liability, comprehensive, collision and uninsured/underinsured motorists; varying Health Insurance plans which help give your company a benefit when hiring new employees.
Unfortunately, scammers are everywhere. As a business owner conscientious of money and how it is spent, you are likely always shopping for a “great deal.” Before you jump on that low premium, small business insurance plan you just heard about, find out all the facts about the policy – and the company, first.
First Red Flag
If a small business insurance plan sounds too good to be true, like most things, it probably is. Fake business insurance plans tend to have a number of features in common, such as dramatically lower premiums then the rest of the small business insurance market. If this insurance company in question was a legitimate insurance provider, there is no way, with these super low premiums in comparison to the rest; they could afford to stay in business.
Red Flag Number Two
Fraudulent insurance plans tend to accept everyone, no questions asked. Any legitimate insurance provider would be interested in pre-existing conditions and other well known facts that can directly affect the claims they are going to be required to cover.
Red Flag Number Three
Insurance companies that do not use the term “insurance” in their literature. It seems trivial; however, some fake insurance providers believe that leaving out this term alleviates their obligation to live up to their corporate responsibility.
Make sure you:
- Do not sign anything until you are 100% confident you are dealing with a financially solid company who has been around for more than four years and who is backed with good ratings.
- Call your state’s Department of Insurance office in order to confirm that the insurance provider in question is legitimate and has a license to do business with the state.
- Consult with references in other small businesses that are covered by the small business insurance plan in question – if the insurance company cannot provide references, take this as a sign that you should not do business with them, and that they have something to hide.
- Contact a local or regional small business association for insurance recommendations.
Include excess liability or “umbrella” coverage.
Consider a health insurance plan to attract and keep good employees.
Consider carrying employment practices liability coverage if you do have employees.
Always maintain a clean and safe workplace.
Include any tenant improvements in your property insurance policy.
Adjust your insurance as your company grows.
Maintain a buy-sell agreement with all partners that is funded by life insurance.
Do not consider self-insuring any such part of your work’s compensation risks.
Overlook ongoing employee training on maintaining a safe workplace environment.
Think that you cannot afford insurance.
Deal with contractors who cannot provide insurance certificates.
Allow insurance policies to lap for non-payment of premiums.
Withhold information from small business insurance provider.
Overlook earthquake or flood insurance if you live in a high risk area.
Once You Decide On a Small Business Insurance Policy, Then What?
Once purchased, you should be presented with a “binder” signed by the insurance agent. This will show you as the insured party, the effective date of small business insurance coverage, limits of liability and other related information.
Once you receive your policy, request that it is hand delivered to you so you may review in person and discuss any issues or questions you may have upfront.
Note: Insurance Company has a 60-day underwriting period in which the insurance provider can cancel your policy at any time. You are required to receive at least 10 days written notice of this cancellation. If they are non – renewing you, you are required to receive 60 days, but no more than 120 days’ notice.
- Call your agent and insurance company immediately.
- Contact the police and report any breaking of the law.
- Making temporary repairs to protect your property from being damaged any further. Hold on to any damaged equipment parts so the claims adjuster can examine them.
- Continue business as usual as soon as possible.
- Contact your small business insurance agent and let them know you have a liability claim.
- Give your agent details about the event – including names and numbers of eye witnesses.
- Do not spend money on anything relating to the incident other than first aid for anyone who says they have been injured.
- Immediately notify your agent if a lawsuit ensues.
Worker’s Compensation Claims
- Immediately assess the employees injuries and provide medical care if necessary. The goal is to do all you can in the moment to encourage the employee’s recovery and return to the workplace.
- Call your small business insurance agent.
- Comply with your insurance company’s investigation of the claim.
If you are dissatisfied with the way your claim was handled, review your policy thoroughly for information about the procedure disputing a resolution. You’ll have to follow the exact procedure outlined in your policy.
Here are some recommendations:
- Speak with your small business insurance claims manager, claims adjuster or agent to share perspective.
- Call the insurance company’s consumer affairs division and give them your story and the reasons you believe you should receive a larger settlement.
- Contact the department of insurance for your state concerning your grievance.
- If none of the above work for you, consult a lawyer whose specialty is with insurance issues to see if they think you have got a claim.