Whether you are running an established business or are just starting out, you should regularly be thinking about insurance. Insurance plays a factor in almost everything you do with your business, whether it is having property and equipment, employees, clients who visit you, a fleet of vehicles, and everything in between.
No two businesses are alike when it comes to their insurance needs. Even companies that do the same thing may have differences in their physical location or in how many employees they have that will affect their insurance coverages. The truth is, even small businesses face lawsuits regularly, and anything can happen. You need to make sure that you have the right protections in place because even one negative incident could have devastating consequences. Here are some questions to ask your business insurance provider to make sure that your coverage is adequate.
What kind of coverage do I need?
The type of coverage you need will depend on the specific risks of your business. That said, all businesses can use general liability insurance. It provides protection against lawsuits that claim you have been negligent. You can get compensation for your court and legal costs, as well as for any damages that are awarded to the complainant. There is always a risk of injury, no matter how safe you keep your business, so this coverage is necessary for everyone.
If you have employees, then you will need to have workers’ compensation coverage in case they get injured or sick at work. Commercial property insurance will cover you for damage, theft, or vandalism to your property, equipment, and inventory. Errors and omissions insurance, also known as professional liability, will protect you in case you or an employee makes an error that leads to a loss for a client. You may also need commercial auto insurance if you have any vehicles for your business.
If I work from home do I need commercial property insurance?
Most likely the answer is yes to this question. Many entrepreneurs start their businesses out of their homes and do not think about extra property coverage. They assume that because they are under their own roof that their current homeowner’s policy will cover them. Unfortunately, this is not always true and will depend on the policy.
A homeowner’s policy will not protect against equipment that you are using for your business, including computers and printers. It will also not protect any inventory that you have on-site. It’s crucial to check with your provider to see what is and isn’t covered. You certainly don’t want to be left holding the bag if you suffer damage or loss to business property.
Do I need commercial automobile insurance?
This is a tricky one to answer, it depends on specific situations. Of course, if you have a fleet of vehicles owned or leased by your business, then you need commercial coverage. However, where it gets complicated is if you use your personal vehicle for business needs. Your personal automobile policy might not protect you.
Going back and forth to work will not require commercial insurance. However, if you are moving between job sites and carrying equipment or supplies, then you will need coverage. If you are delivering your product to customers, then you will need commercial protection in that situation as well. Someone like a real estate agent who drives between viewings most likely will not need coverage since they are still only doing regular driving with no extra equipment. It’s always important to double-check this information with your insurance provider because if you get in an accident you could be in big trouble without proper insurance.
Is extra coverage needed if I partner with another business?
When you enter into an agreement with another business for a project, you most likely will not need extra coverage. However, you should make sure that the other party has adequate coverage for the project that you are undertaking. They will also request the same from you. Shared risk should be a part of the partnership. You and the other entity can provide each other with a certificate of insurance. A certificate of insurance will show how long your coverage is valid, how much is covered, and who else is covered. Do not enter into a project without one, or you might be taking on all the risk.
What is not covered by my policy?
While it’s important to know what is covered by a policy, it may be just as vital to understand what is not covered. A glaring example of this is when commercial property owners discover that they are not covered for flooding under their standard policy. Your business may face unique risks that other businesses do not have. If you think you need flooding insurance, for example, then you may have to get it added to your coverage.
Never think that you are covered for every possible risk. It is up to you to identify everything that might need protection, and talk to your provider about it. Make sure that they explain clearly what is not covered, and the reason why that courage is not on your policy or not available. Request a detailed breakdown of your policy along with the charges so that you know exactly what you are paying for.
How do I submit a claim correctly?
Do not wait until disaster strikes before you figure out how to submit a claim. Talk to your provider ahead of time so that you know what is needed. In some situations, you may need to take photos of damage or destruction, and failure to do so could affect your claim. If you haven’t learned how to properly submit ahead of time, then you could find yourself being declined for an important claim.
How do I save money on my coverage?
Your provider may not want you to save money on your coverage, but if you ask, they will give you options. You may have protections that you don’t need, for example. There may be a way that you can save by bundling your coverages together. You can also shop around with other providers to test out prices and see if they can offer you something similar. With insurance, you can also be proactive and assertive to look for savings to get the most coverage for the lowest cost.
Insurance is an important part of any business. You might never have to use it, but it should always be a part of your budget and planning. Make sure that you can get the most out of your coverage by asking these important questions to your insurance provider.
Alicia Saville did her degree in psychology at the University of Edinburgh. She is interested in mental health, wellness, and lifestyle.
