Any business interruption can be a major financial setback for small businesses.
Fortunately, businesses have access to a wide range of business insurance plans, to protect them against these dangers.
Consultation with an experienced and trusted insurance broker is crucial in order to create a policy plan to suit your business needs.
1. Know what you need
No two businesses are the same. Every business has its own unique risks and, therefore, unique insurance needs. It it is important to do your homework before insurance shopping, to ensure that you are pursuing the right coverage for your business. Common insurance types that may be necessary for your business include:
Professional liability insurance: Provides cover for personal injury or property damage resulting from malpractice, errors or negligence in the service provided to customers. These types of policy are only intended to cover damage or injury suffered by others. It will not cover any property damage or personal injury that is suffered by you or your own staff.
Commercial property insurance: When your property is damaged, repairs and replacing equipment can be costly. Property insurance covers your contents, fixtures and fittings against loss, damage or theft. It can also includes loss of income cover, damage repair and general theft. If your area of business is prone to specific threats such as floods or bushfires, it is important to check with your insurer to ensure these risks are covered within your policy.
Workers’ compensation insurance: This insurance will cover death benefits, disability and medical treatment in the event that an employee is injured or dies in the course of his work. Once the first employee has been hired, workers’ compensation insurance should be added to a business’s insurance policy.
Personal accident and sickness insurance: If you are a sole trader or independent contractor, this form of insurance is particularly important. As the heart and soul of your business, this insurance will compensate for loss of income suffered if you have an accident or illness that prevents you from carrying out your work for an extended period of time.
Business vehicle insurance: If your business uses vehicles, you will be legally obliged to obtain third-party injury liability. These policy costs will differ depending on the type of vehicle you use, and how it is utilised. An insurance agent can ensure you receive the best deal available for your specific transportation circumstances.
Business interruption insurance: Business interruptions caused by catastrophic events can result in a significant loss of income. Business interruption insurance compensates a business for its lost income during these events, putting it back on its feet and at its profit level from before the interruption.
2. Look for discount opportunities
Many insurance providers offer low prices and discounts for combined policies. To Therefore, when choosing your business insurance policy it is important to consider how you might save from bundling certain types of insurance together. A good insurance agent can help you trim your costs, reduce your exposure and possibly bundle your coverage from one carrier.
3. Use professional assistance
Due diligence is vital when researching insurance coverage. Using independent, professional assistance can help you compare rates and coverage, and give you peace of mind in knowing that you are not overlooking something important. With so many hidden risks associated with running a business, consultation with a professional insurance agent is key to ensuring that you don’t under or over-purchase on your insurance policies.
4. Know your legal obligations
If you run a small business, there are certain legal obligations when it comes to risk management and insurance. These legal obligations will differ depending on the business structure, type of business you are running and industry that your business operates within. These obligations include Occupational Health and Safety requirements and other legal frameworks. Therefore, in order to avoid a costly lawsuit, it is imperative to understand your legal requirements and purchase the relevant insurance to fulfill these obligations.
5. Tailor your coverage
In insurance, as in life, one size does not fit all. Therefore, you can tailor most policies to include the things that are relevant to your business. Consultation with an insurance specialist can help you tailor your coverage, so you only pay for what you actually need.
6. Review and update
As your business grows and changes, your insurance needs will change alongside it. Taking the time to review and update your policies will ensure you are spending exactly what you need to and that you have updated the coverages you may not have needed previously. Regular consultation with your insurance agent will help ensure that your coverage matches your potential liabilities.
There are many different insurance packages available that can cover the basic risks for small businesses. Following these six tips is key to ensuring that you receive the best deal and coverage for your individual business needs.
Bio: Laura Costello is in her final year of a Bachelor of Law/International Relations at Latrobe University. She is passionate about the law, the power of social media, and the ability to translate her knowledge of both common and complex topics to readers across a variety of mediums, in a way that is easy to understand.