According to the Insurance Information Institute, around 40% of small businesses haven’t purchased insurance. That’s a startling number, especially considering how difficult it can be to keep a small business up and running. When finances are already stretched thin, an unforeseen incident can easily put a company under.
A shorthand list of possible nightmare situations that can befall small businesses include:
- Natural disasters
- Man made disasters
- Employee theft
- Employee injury
- Malpractice lawsuits
- Copyright infringement
- Tech breaches such as data theft
The best way to protect your company from these events is by taking advantage of your insurance options. However, many business owners aren’t sure how to make the most of their policies. For that reason, we composed a short list of tips that can help you maximize the value you receive from coverage.
Evaluate Your Risks
There are many different types of insurance options that can be purchased by a small business, but it’s unlikely that all of them will apply to your company. For example, if you run an ecommerce business from your laptop, you likely won’t need to sign up for property coverage. However, it would probably be wise to sign up for data coverage.
To evaluate the risks posed to your company, you should ask yourself questions like:
- What kind of risks do our employees face?
- Where are we most financially vulnerable?
- Are there any risks that are unique to our industry?
It’s not always easy identifying the risks posed to your company, which is why it can be helpful to hire an independent insurance expert to help guide the process. With their help, you should secure comprehensive coverage that doesn’t result in your business paying for insurance that is nonessential. Additionally, you should consider arming your business even further by seeking professional legal services from Lawyers.com; or look for a specialized lawyer in your area.
Consider a BOP Bundle
BOP stands for Business Owner’s Policy. It refers to a bundle package of insurance options available to business owners. Insurance providers realize how expensive it can be to pay for several different types of coverage, and with that in mind many offer bundle packages containing several different coverage options. This helps business owners save money while receiving a comprehensive policy.
A standard BOP bundle might include:
- Building Coverage: Building insurance helps protect you from the potentially devastating cost of damage to warehouses or other structures that your company may own.
- Cyber Liability Insurance: If you sell products through an online website, and those products end up causing harm in the real world, your website might be cited as a defendant in a lawsuit.
- Workers’ Compensation Insurance: Even if your employees don’t engage in physical labor, there are still many ways an employee may get hurt on the job. When this happens, the company is almost always held liable. Workers’ compensation insurance can protect a business should an accident occur.
- Disaster Insurance: Natural disasters are on the rise. Wildfires in California, floods in the South. If a natural disaster affects your business and you don’t have insurance to cover the damages, it can potentially devastate your finances.
Personalize Your Insurance Package
Signing up for a BOP is a great way to tailor your insurance policy to your business’ specific needs. However, that’s only the first step in a process of personalization that will ultimately allow you to save money while receiving maximum coverage.
After reflecting on the risks posed to your business with the help of a professional insurance agent, you can start to identify company-specific coverage options, like endorsements, which aren’t often included in a BOP bundle. Organizations like Mitchell business solutions can help you identify many of these specific policy options.
Update Coverage
It’s likely that as your business grows, so will the ways in which your company requires coverage. Unfortunately, many businesses purchase insurance when they are getting started, but forget to update their policies, only to be blindsided by an unexpected event. Successful companies regularly update their coverage options to parallel company growth.
Insuring Your Business
No matter the size of your business, all companies will benefit from purchasing insurance. There is no telling when something unexpected might happen, and insurance is often the only thing standing between a healthy rebound and financial collapse. Take the time to carefully reflect on the vulnerabilities inherent to your business and seek corresponding coverage.
