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Insuring your small business is an important component of risk management. Read this guide for a step-by-step guide on how to get business insurance.
You’ve already asked yourself if business insurance is necessary — and it certainly is. But how do you get business insurance and find the best fit for your business needs?
Small business insurance is an important cost of doing business, but obtaining coverage doesn’t have to be an overwhelming process. Once you know why you need to purchase business insurance, you can set out to confidently protect your business and the people you employ.
Nowadays, it’s possible to get business insurance from a reputable company in as little as thirty minutes.
Keep reading to learn how to get insurance for a small business. But first, if you’re wondering exactly what business insurance is and what it does, our “What Is Business Insurance?” piece will explain the fundamentals.
Table of Contents
Business insurance is available to you regardless of your industry and type of business structure. But before starting your search or jumping into a conversation with an agent or broker, it’s best to have certain documents and information ready.
Here are a few potential small business insurance requirements:
In addition to the above information, you’ll be able to best decipher your needs once you’re familiar with the basic lingo of business insurance.
If you are a small business owner and are starting to look at your business insurance options, we are here to help.
Follow these steps, and you’ll be well on your way to buying appropriate insurance coverage!
You’ll first decide what type of business insurance you’re in the market for.
Give some thought to your legal requirements and the specific risks your company might face. Ask yourself questions such as:
Knowing what you need is more than half the battle. Did you know you can insure your business from cyber-attacks? Tell your insurance professional about your risks and determine if there is coverage available.
Researching how your business can benefit from different kinds of coverage is a great place to start.
Give special consideration to insurance plans that you know will give you the best protection in light of your business’s inherent risks. (On the flip side — you’ll likely be throwing money down the drain if you’re paying for insurance that doesn’t address your most pertinent risks.)
Here is a list of some of the most common types of business insurance to get you started:
Type of Insurance | What It Covers | Who It Is For |
---|---|---|
General Liability | Protects your business from the threat of a lawsuit | All businesses |
Property Insurance | Protects your building and things inside your buildings from damage and accidents | Businesses with a physical property site and products located in those physical locations |
Business Interruption | Provides resources if your business is forced to stop or relocate | Businesses located in riskier areas and businesses who might work with vendors in risky areas |
Commercial Auto Insurance | Provides protection from accidents on your commercial vehicles | Businesses that rely on automobiles to do business |
Workers Compensation | Provides protection to you and your employees should they become injured on the job | All businesses |
Professional Liability (E&O) | Protects your business during a lawsuit if your business commits errors or malpractices | Any business that provides a service |
Product Liability Insurance | Protects a business from a lawsuit related specifically to the product it sells | Any business that manufactures, sells, or distributes a product |
Home-Based Business Insurance | Protects any business-related items inside your home not covered by home owner's insurance | Any business owners running out of their own homes |
Business Owners Policy | Includes both general liability and commercial property insurance | All businesses |
Umbrella Insurance | Provides a bigger ceiling for the legal costs of a lawsuit that extends your liability coverage | All businesses |
Once you’ve done your due diligence, you’re ready for step two.
The small business insurance company you work with will need information about your business to accurately gauge your riskiness and give you a quote. Gather the information before you shop.
Generally, the details you’ll need to provide will depend on the kind of policy you’re buying. Similar to what’s been mentioned above, the most basic questions usually are:
Also, you should use this time as an opportunity to identify the specific facets of your business that will benefit the most from insurance. Here are a few real-world scenarios to help you get on track:
The more prepared you are, the better.
Now that you have all the numbers and pertinent information at your fingertips, it’s time to shop around and find the best fit for you and your business. There are a few ways you can do this.
If you have larger or more complicated assets or many moving parts to your business, sitting down with an insurance expert is the way to go.
Brokers do not work for or represent a single insurance company. Rather, they work with you to determine your risks and select which types of insurance will provide your business with the best protection.
A few sites, including Insureon, CoverWallet, and Simply Business Insurance, will comparison shop for you and show you the best policies for your business. Some commercial business insurance companies also offer online quotes and rates.
Many well-known carriers that provide home and auto insurance will also offer business insurance. If you’re set on pursuing coverage from a specific insurance company, pick up the phone and strike up a conversation.
You know what you want, you’ve found the best price, and now the only thing left to do is purchase your policy. This step is straightforward — but how do you know you’re purchasing an insurance policy that really meets your needs?
Be on the lookout for these qualities:
Typically, business owners pay their insurance on a month-by-month basis. However, it’s sometimes possible to pay the policy in full up-front. You could even cut back on business insurance costs by doing so.
Done and done. Pay those premiums and protect your business!
Now you’ve got an insurance policy that best meets your business’s needs…at this moment, at least. As you grow and expand as a business, it’s important to update your policies. Your insurance needs will change as your business changes.
What are a few changes that could prompt a renewed insurance policy?
Every year, you’ll have the chance to review your needs and choose the coverage that best addresses them.
Research what you need and want, gather your information, comparison shop, purchase, and renew every year. When it comes to small business insurance, it can be that simple.
Shopping online is a great start since you’ll get a better sense of your options and how much they cost. When you’re ready, have a conversation with an insurance expert familiar with your industry. Check out reliable business insurance providers like The Hartford or Nationwide Business Insurance.
At the end of the day, insurance is about peace of mind.
An accident, lawsuit, or Act of God tear shouldn’t be your business’s downfall. Follow the advice given here as you’re shopping for small business insurance, and rest in the assurance that your hard work is protected.
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