Small businesses need insurance coverage too. From fire and water damage to employee embezzlement situations, there’s a lot that companies need to cover, just in case.
After September 11, the cost to cover individuals and businesses skyrocketed while other coverage costs decreased. With this in mind, business owners renewing existing policies or starting new policies should evaluate their situations and find the best coverage for business liability.
Experts suggest starting off with a policy that covers lighting systems, carpeting, equipment, machinery, furniture, inventory and computers.
Then, decide whether your company requires a basic insurance plan or something more broad. The former covers damage caused by fires and storms. A more specialized coverage will protect almost all property damages.
There's also a business owners policy to consider. This policy covers your property and business-related assets inside and around your building. It's a combination of property and liability insurance. A business owner's policy also covers the property of customers and others who have physical assets on your business' premises.
You'll need additional insurance when looking for a plan that covers fraud, burglary or robbery. Other popular add-ons include data protection, personal assets and computer virus protection.
Renting office or storage space? Before you purchase property insurance, read through the agreement carefully: The building owner’s policy may cover you. Add-on wise, if you're in a flood, earthquake or hurricane zone, you might want to pay purchase disaster insurance.
If the above already sounds daunting and your business has a lot of coverage issues to consider, then go with a bundle. A la carte-ing your insurance with different insurers keeps costs up. With a package deal, using the same insurer will keep your premiums down.
Consider joining an association. The Chamber of Commerce and other business groups give members benefits, such as lower rates for businesses that purchase their insurance at group rates.
Once you decide on an insurance plan, make sure you fully understand it. For example, know the difference between a guaranteed replacement cost insurance and an actual cash value policy. The former pays to replace damaged property and the latter pays for the current value of the property.
Be sure to compare the coverage. The extent of business liability coverage is vast and varies. It’s a good idea to review several policies and figure out exactly what is included and excluded.
By speaking with business owners in your industry, you’ll get some perspective on the amount of coverage your company needs. Check out the latest actions and settlements in your field and the level of coverage most businesses use. That feedback and research provide a reasonable range to work with.