WASHINGTON, May 10, 2017 – Entrepreneurship is all about taking risks. From the get-go, entrepreneurs involved in a small- to medium-sized business (SMB) are exposed to a myriad of risks. One catastrophic event or even a careless mistake that results in a lawsuit is enough to wipe out any small business out of existence.
As a business owner, you already know you need business insurance that’s precisely tailored to your enterprise. The problem is, however, you may not know where to begin to put such a package together. The good news is that you probably already have some experience in purchasing insurance, whether it’s personal homeowner’s or auto insurance. The process of insuring a business is not really much different.
When making your initial determination, it’s the probability of occurrence and the extent of loss that a particular risk poses to a business that makes all the difference.
While you need protection, you also need to be smart. Don’t let all your revenues go towards paying insurance premiums. If your business is already insured, review your insurance policies and requirements now. Then to make sure that you’re not paying for coverage you don’t need.
To determine this, you need to be asking the right questions. Here are five key questions SMBs should ask when establishing or reviewing insurance coverage:
What Type Of Coverage Do We Need?
Business insurance plans vary from carrier to carrier and can come with unique advantages. That’s a good thing, since every business itself is unique, just like its insurance requirements. Consult an experienced agent familiar with business insurance needs. Have the agent explain to you the type of coverage are a must have for businesses in your line of work. But also make sure that these recommendations answer your business’ specific needs.
Are Our Business Investments Protected?
The ultimate goal of any business is to maximize profits and attain growth targets. For a business to grow, it has to make the right investments. But, as with any type of investment, anything can go wrong, resulting in a negative impact on a business owner’s efforts to grow. You can help assure that your business’s investments in key personnel, equipment and other related areas are specifically protected by purchasing the appropriate insurance policies.
Are There Any Discounts We Should Be Taking Advantage Of?
Getting coverage for your business can prove to be expensive. Being conscious about the cost of your business insurance in terms of investment, cash flow and growth projections is important, not only for the coverage itself. If you can calculate ways to minimize insurance costs, you can achieve huge savings in the long run, which certainly helps the bottom line in any SMB.
Ask your insurance provider about available discounts that can be applied to the kinds of insurance policies your business needs, and take advantage of them if your business qualifies. In property and casualty coverage, for example, a company can frequently achieve savings by taking certain safety measures in the workplace, which can lead to less corporate liability.
When it comes to insurance discounts, the general rule is to “ask and you shall receive.” If you don’t ask, chances are that you will not receive. Discounts are a sure-fire way of getting the least-expensive insurance coverage for your business. However, always make sure that what you absolutely need to be covered in your business is actually covered.
Do I Have Dual Coverage?
This is a very important question especially when it comes to achieving business insurance savings. You may currently carry two types of coverage whose protection overlaps. If you find yourself in a duplicative situation like this one, you are overinsured, an unnecessary and negative situation that can be expensive for any business. Be sure to review your plans from time to time to avoid overinsurance through overlapping or dual coverage.
What Can You Do Better With Regard to Your Business Insurance?
This is one of the most important questions business owners can ask themselves about their current insurance. Take a close look at your business processes as well as your risk management procedures and try to come up with ways to improve and minimize risks involved, which might even mean getting your current or prospective insurance carriers involved. When you’re satisfied you have the answers to your questions, make sure you get the the appropriate insurance coverage.
For large corporations as well as SMBs, appropriate and affordable insurance coverage is crucial success. As an entrepreneur in particular, you should take great care in this area and focus on getting it right. This generally won’t happen overnight. It does take time and patience. But if you persevere, you’ll eventually achieve the right balance between cost and coverage simply by asking the questions we’re listed above and using them as your guide.