When you own a small business, you have to juggle lots of responsibilities. Responding to your customers, keeping your website running, making sure overhead bills are paid—there are constant demands on your attention, and your checkbook.
Business insurance is likely one of the items on that long list—and it's a very important one. You want to make sure you have the right amount of protection for your company. Here are some factors to consider as you make those big decisions about business insurance while keeping your bank account in mind:
Some business owners buy multiple policies with different insurers—for example, a liability policy and another policy to cover their office furnishings. "Bundling," or placing all your business coverage under one policy with one insurer, may help reduce your premium costs, and, as an added bonus, can make managing your insurance renewals less time-consuming.
The amount of money you pay in the event of a claim, before your insurance contributes, is known as a deductible. Increasing the deductible for each eligible coverage on your policy may mean reduced premiums—and more money in your pocket each month. However, while saving money on premiums by electing a higher deductible may be attractive, make sure you think about how much money you would have available to cover your deductible if something unexpected were to happen.
A business can change rapidly. New risk exposures may suddenly emerge that require special coverage. For example, even a few years ago, some small business owners didn't worry about Internet security. Yet, a study cited by the U.S. House of Representatives Small Business Subcommittee on Health and Technology in 2013 found that 20 percent of all cyberattacks target businesses with fewer than 250 employees—and 60 percent of small businesses victimized by cybercrime close their doors within six months. In this case, a new trend might lead small business owners to consider data compromise coverage.
When you renew your policy, think of it as an annual check-up. Be sure to take advantage of the business insurance information your business insurance agent can provide. Your agent understands the current risk environment in which today's small businesses operate and can help you make decisions to better manage your business and personal risk.
The best defense is a good offense. Taking measures to reduce your risk, the potential for fire or customer injuries can make a big difference. Many reputable websites provide small business owners with advice about risk management and how to run a small business. The U.S. Small Business Administration, the American Red Cross and the Insurance Institute for Business and Home Safety are just a few of the resources available. Implementing sound risk management practices in your small business can help your business avoid some preventable losses.
The days fly by when you own a small business, but small business insurance is an important item on your packed to-do list. Whether you must insure your vehicles or ensure you can meet your financial needs in the event of your disability, there are business insurance options for you to explore.