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Step by Step Guide to Finding the Best Business Insurance
Author David Schneider | Aug 29,2007
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Business insurance is a necessity because businesses are inherently a risky venture. The fast pace of business and unexpected changes could present a variety of risks. In order to get the best business insurance, you will need to consider a number of factors that contribute to business risk.
Perform a Risk Analysis
Create a listing of all of your business risks. You might be able to alleviate some risk without buying any insurance by changing some function of your business. Other risks will require business insurance.
Consider these types of risks:
- Damage to business property, damage to inventory or even damages due to employee theft
- Liabilities, such as potential personal injury claims by your customers
- Risks that could interrupt business and prevent income flows for a period of time
In addition, you will probably need other types of insurance for employee-based risks, such as workers' compensation, unemployment or employee benefits. Disability and life insurance might be necessary as well. By performing a risk analysis, you will know which types of risks you will need to insure your business against.
Decide on an Insurance Package or Individual Policies
Insurance companies can provide individual policies to mitigate each of your risks. For instance, you might not deal directly with customers, so you would buy insurance policies to protect against employee risks, but would not buy a policy to protect against personal injury claims by your customers.
Larger companies could save a few dollars by buying packaged insurance. Bigger companies face more general risks as they gain more employees, more customers and more property. Packaged insurance lumps together some of the most commonly needed insurance policies into one package for the business. One drawback of these types of policies is that there is less flexibility in creating a business insurance package that uniquely fits your business.
Get Input from Your Key Advisors
Inherent in business risk are a number of complicated legal and financial issues. Before you buy business insurance, you should discuss your risk assessment with your lawyer, accountant and/or financial advisor. These individuals will be able to help guide you in determining your actual risk and will offer great advice on how business insurance could help you legally or financially.
Comparison Shop
There are a number of companies that offer business insurance, so don't stop looking for a great policy after you get your first quote. Look at how it would affect your premium price to go with a package insurance policy versus individually underwritten plans. Go over your risk assessment with the insurance agent and make sure that you are covering all your bases with the policy you are purchasing. |
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