Starting a small business is already a big risk. Hence, it is natural for a business owner to save as much money as he can to focus on bigger things that can help in developing his business. However, it’s quite tempting to not have business insurance especially if it’s not required by the law in the first place.
In fact, the Next Insurance conducted a survey and found out that approximately 44% of businesses have no insurance at all. If you are one of the business owners who is still contemplating over this matter, it is important that you first understand the importance of business insurance and how it can help your company.
1. Learn the type of available commercial insurance
To start with, you must learn the different types of commercial insurance available. In that way, you’ll be able to choose the right one for your business.
• Premises liability. It refers to the insurance that covers the ownership and the occupancy of the said business. For instance, a case wherein a customer had accidentally slipped on the wet floor (assuming you’ve placed a sign).
• Operations liability. It refers to the insurance that will cover the expense for any injury that occurred in the process of any business activity. Most of the contractors and blue-collared workers are associated with this insurance. For instance, one of the workers at a contractor’s job site is badly hurt because of the falling debris while walking on the ground.
• Products and completed operations liability. It refers to the accident that about the complete outputs of the manufacturer. Let’s say, one of the medications caused adverse effects to the patient because of its defective parts.
2. The nature of business plays a big role
When it comes to the insurance, the nature of your business will most certainly play a major role whether you are to pay a lot or not. For instance, it seems reasonable that the fireworks shop will pay more for insurance compared to a clothing shop because there is greater risk involved in fireworks shop than the clothing store. Aside from that, the insurance company will also check the past sales of the business when deciding on the rate. Because no one can determine what’s going to happen in the next couple of months, or weeks, or even hours, the quote is just simply an estimate. If what happened is more than what they have anticipated, expect to owe some to the insurance company, but if less, then the insurance company wouldn’t hesitate to give back your money.
3. Know the limitations of liability insurance
Before you choose one, it is important to know the limitations of the liability insurance. For instance, the general liability does not necessarily mean that it’ll cover everything. The sickness of the employee is not included. Even if it’s full-time or part-time, or even the family members that are working for your company. If it had been proven that the damage is intentional, it would not also be covered. The quality of artistry is also not included. That’s why it is important to talk with an insurance professional to serve as your guide in choosing the right insurance company.
For some states, liability insurance is considered a requirement for business owners. Hence, it is essential to educate yourself about business insurance first. It will help you to make the right decision in choosing the right insurance company for your business. Aside from that, the services of an insurance professional are helpful, especially for first-time business owners.