As a business owner, you make choices every day. You choose what to sell, how to sell it, who to hire, and how much to pay them, and many other things. Getting the right insurance is one of the biggest decisions you will have to make. The reason for this is that if anything bad happens and you do not have protection, you could end up in devastating financial circumstances.
Business insurance is not the same as personal insurance. Most personal plans, whether they be homeowners plans or automobile plans, are very similar. That’s because most people have similar homes and similar cars. However, every business is unique. They carry different risks based on a variety of factors, such as their location, what equipment they have, what type of work they do, and how many employees they have. There are countless other factors when it comes to business insurance as well.
That means as a business, it may not be an option to get a standard business policy. You may need to add things to make sure you are protected, or even ignore coverages that you don’t need. The important thing is that you need to be able to rest your head at night knowing that you, your business, your staff, and your customers are all covered by your insurance. Here’s who to customize your business insurance policy to be perfect for you.
Add Up Your Assets
A business has many assets. For one, the building in which you operate is an asset. However, much of your equipment and supplies are also assets that you need to operate properly. Your insurance should reflect the total cost of replacing all of your assets.
Take an inventory of everything that could be considered an asset to your business. Make sure you include not just your building, but the surrounding property, your electronics, your furniture, your inventory, and any equipment you have. You might be surprised at how much value it all has, and how much it would cost to replace. Your insurance should have a limit that goes at least to that amount. If you need to, purchase umbrella insurance to bring up your coverage limits, or get a whole new policy altogether.
Choose a Policy Developed For Your Business
While no business is exactly the same, there are some similarities among business types. If you have a consulting business, you probably have similar risks as other consultants, for example. Many insurance providers offer pre-developed insurance policies for specific businesses. For instance, you can get real estate agent insurance, or get roofing insurance for your business. That way you know that you probably have your basics covered for your business. These packages would not be comprehensive, however, so you might need to add on to them to make sure you are fully covered against all of your risks.
Identify Your Risks
This is probably the most important part of the process of customizing your business insurance. The risks you face are what determine what coverage you need and don’t need. There are many factors to consider. Are you vocal in the media or on social media? Then you may want to get liability insurance in case you say something that others could claim has damaged their reputation. Do you store a lot of sensitive data? Then you need cyber coverage in case of a data breach or cyber attack.
Construction companies have a lot more risk than a freelance writer, for example. You need to determine every risk you might have, and see if there is a possible coverage for it. If you try to cut corners, you could end up holding the bag when you need to pay damages, legal costs, or medical bills.
Regularly Review Your Inventory
Other than your staff, your inventory might be the most important asset that you have. Without inventory, you have nothing to sell. With nothing to sell, you have no way to make money. Many insurance policies will cover the maximum inventory you have on site. However, there’s no reason that limit won’t change over time. You may have grown your business and have more inventory on hand than ever before. Plus, you could also have inventory in transit that is not properly or fully covered. Make sure that your policy can also cover inventory that hasn’t gotten to your warehouse yet.
Take Security Systems Into Account
Having security measures in place at your place or work is important for your safety and the protection of your assets. You can have cameras, alarms, keypads, and motion detectors to help deter criminals and catch them after the fact. However, this can also help to reduce your insurance premiums. For instance if you are paying for theft protection, your provider may offer you a lower cost if you have measures in place with the same limits as before.
Your neighborhood should also play a factor in what type of coverage you have. Are you next to a large body of water that tends to overflow every decade or so? Make sure that you have extra flood coverage to protect you. You may also be in a very safe neighborhood, or a dangerous one. You can adjust your policy based on those factors to make sure you have the protection you need, or so that you don’t pay for something you don’t. Insurance companies will also take into account if there have been other incidents in the vicinity of your building to determine your premiums.
Insurance is one of those things that you have to pay for but hope that you never need. Even if you never use it, it does not mean that it wasn’t worth it. Having the right protection will ensure that you don’t end up in financial peril or bankruptcy because of an accident or emergency. Your business, however, might have certain risks or liabilities that are unique. Because of this, you need to customize your coverage so that it reflects your specific risks and assets.