The most common question a new small business owner asks is “How much coverage do I need for my small business?” There is no universal answer to this question. Every business is different and requires different small business insurance plans. It can be helpful to research various local insurance companies like TruShield Insurance. However, you must look into each policy, its benefits, and available add-ons. Expensive insurance is not always better insurance. Affordable policies can provide the right protection for you and your business. Here are six strategies you can use when you are shopping for business insurance.
- Business Risks
If you are a new business owner, you may have thought of the big business risks such as being sued by a customer. However, there are many other business risks that you need to inventory. What happens when a key employee passes away? Do you run your business out of your home or in a commercial building? You will want to create a list of all potential business risks such as
- IT equipment
- Data breaches
An insurance broker can also help you think of business risks that you may not have considered.
- Bundle and Save
At some point in your life, you more than likely have seen an insurance commercial. In insurance commercials, they will often advertise bundling. When a customer uses one insurance provider for different types of coverage such as home, vehicles, equipment, and personal property, it is called bundling. Insurance companies want your business. Insurance companies offer discounts when you bundle because you chose them for all of your coverage needs. Insurance companies may also offer new customer discounts. You do not want to cut corners on your insurance policies. Instead, you can save money by bundling and paying the policy in full (generally six months).
- Personal vs. Business Insurance
Like your bank accounts and credit cards, you will want to purchase small business insurance separate from your personal insurance. This can be confusing because you may use the same car for your business or you may run your business out of your home. Personal insurance policies will not cover unforeseen damages or accidents caused by commercial activities. For example, if you are using equipment in your home for commercial purposes and an accident occurs, your personal insurance policy will not protect you, your property, or your business.
- Types of Business Insurance
Before you call an insurance company, you should familiarize yourself with the different types of commercial insurance. Each commercial insurance policy type will mitigate risk. Here are the top common types of commercial insurance in Canada
- General liability
- Professional liability
- Commercial property
- Commercial auto
- Key person
- Directors and officers
- Business interruption
- Insurance Broker
When your plumbing breaks in your home, you call a plumber. A plumber knows how to assess, diagnose, and repair your home’s plumbing system. An insurance broker is an experienced professional that has extensive knowledge about insurance policies and companies. They will represent you and your business to insurance companies.
They will negotiate contract prices and policy coverage. They understand the front and back end of insurance companies. Insurance brokers are a tremendous asset to any business owner. You can trust them to find the right policy coverage for your business while you focus on the business start-up and operational needs. Insurance brokers can identify and mitigate business risks for you.
An insurance broker does not work for any specific insurance company. They are very different from an insurance agent that represents an insurance company and can make a commission for each sale. The client, or you and your business, is the insurance broker’s main concern. They make their money by charging broker fees. Generally, broker’s fees are a percentage of the policy.
Generally, the contract length is six months to a year when you sign with an insurance company. They will send a renewal notice that highlights why your premiums may or may not have changed. The economy and market rates are often reflected in your monthly premiums. If it comes time to renew and your premium has drastically increased, you may not want to renew the policy. You must understand you do not have to renew a policy just because the insurance company sent you a notice. You can shop around different insurance company plans during each renewal phase; this allows you to switch insurance companies without facing a penalty.