Small Business Insurance 101
As a small business owner, your top priority is most likely minimizing your costs while maximizing your profits and growth. Now that you have established a regular clientele and have been earning steady revenue obtaining the proper business insurance can protect you and your assets from potentially catastrophic personal lawsuits.
When running a small business, managing costs is essential. When was the last time you reviewed your insurance to take advantage of lower prices? Have your independent agent help you establish a custom-tailored solution for your needs; bundling or streamlining policies wherever possible is the key to getting the most out of your business insurance, without hurting your bottom line.
The Benefit of Working With An Independent Agent
Forget blindly purchasing insurance online — without an agent, buying insurance can cost you both time and money. Independent insurance agents are willing to work hard to get you the best deals, so you can focus on what matters. Best of all, they’re thoroughly versed in the insurance industry, which means they can decipher cryptic policy language for your better understanding. Independent agents are invested in building a long-term professional relationship with you and can quickly adapt your policies over time to fit your changing needs.
Generally, a single insurance company can only offer you a few policies to choose from. An independent agent can gain access to a wide array of providers and options that will work better for you. They allow you to customize your plan to get coverage on the things that matter while minimizing your risk. While most insurance companies will overlook potential discounts, an independent agent uses their more detailed knowledge of your life and operations to find discounts that you qualify for. Another key advantage of working with an independent agent is their ability to help you through the process of making a claim to get a fair settlement. Don’t be fooled — buying insurance based on price will often leave your coverage lacking. An independent agent knows their way around the industry and can match or even beat some online premiums without sacrificing coverage.
Obtaining A Rate
The cost of insurance premiums charged by an insurance company is determined by mathematical calculations and statistics. These evaluations are done by the risk department of the insurance company. In order to calculate an appropriate rate, your agent will need some vital information about your business. Here are some common questions insurance agents may ask to obtain a rate:
- The name and location of your business
- Construction type and size of your business
- Number of years in operation
- How many employees work for you
- Your total payroll
- Your gross sales
- The scope of your business operations
- Any business-owned vehicle information
- Your insurance claims history
Working with a trusted insurance agent is the best option for small business owners when you’re just starting out searching for the right policies. The insurance agent will make sure you are getting what you need out of your insurance and can help you bundle policies to your financial advantage, which should help you focus on the bigger picture.
What kind of business insurance policies are available?
There are several different types of business insurance that could be right for you. Depending on what your business needs, you may need one or more of these types of coverage, and this list does not cover all of the available policies:
- Business Owner Policy: A business owner’s policy, or BOP, is a package that includes general liability insurance and has been grouped together to provide, at minimum, coverage for the basic common losses faced by a business.
- Commercial Package Policy: Perfect for smaller businesses, the CPP offers a high level of customization that allows you to combine multiple types of insurance to perfectly fit your needs.
- Workers Compensation Insurance: As the name implies, this type of insurance protects your business against employee medical bills and lost wages from work-related injuries. Without worker’s compensation, your business could be at risk for paying out-of-pocket for accidents on the job site.
- Commercial Umbrella Insurance: With commercial umbrella insurance, businesses are offered further liability coverage to shield them against expensive claims. If the price of a claim exceeds the bounds of a business’s underlying primary insurance policies, business umbrella insurance extends liability coverage for any layer of insurance to further protect your assets.
- General Liability Insurance: This coverage protects your business from financial loss that occurs as a result of bodily injury, damage to property, medical bills, defending lawsuits, and settlement bonds or judgments, and more.
- Professional Liability Insurance: No one wants to have to use PLI (also known as errors & omissions insurance), but having it is absolutely necessary for running a small business. Protect your business against lawsuits based on poor guidance. Any time you give professional opinion, advice, or guidance, you are opening yourself up to a professional liability claim.
- Commercial Auto Insurance: This type of insurance does just what the name implies — it protects your company’s automobiles against damage. Commercial Auto Insurance is just like typical car insurance but is classified differently, since commercial vehicles are at a higher risk for damage than personal vehicles.
- Surety Bonds: Surety bonds are a form of credit, often mistaken for insurance because they’re only used when things don’t go as planned. With surety bonds, the risk is always with the person purchasing the bond, rather than an insurance company.
Small Business Insurance Necessities
General Liability and Property Insurance are two types of insurance that every small business owner should have. When you begin to take on employees, obtaining Worker’s Compensation Insurance will likely be mandatory (depending on your state’s specific requirements) to protect you and your workers in the event of any workplace missteps. If you or any of your employees deliver goods or travel to different locations, via a company car or otherwise, getting Commercial Auto Insurance should also be high on your list of insurance priorities.
No one knows your business and its needs better than you do, but determining how and why you should protect your business is an important step. Speaking with a trusted insurance agent can help you get the coverage you need and within an affordable price range.
Maintaining Coverage
If you already have business insurance and are currently working with another agent, take a moment now to ask yourself: “Are they doing everything they can for me?” If your current agent does little more than send you a bill every year, the answer is no.
At LoPriore Insurance, we take our job seriously. We conduct annual reviews, consistently monitor policies for changes, and adapt your coverage to account for new growth, additional equipment, and more. You can trust our agents to keep you in the loop about annual premium increases, long before your policy is due for renewal.
What Type of Insurance Do I Need?
The type of insurance you should pursue largely depends on the method with which you conduct business. This includes what kinds of merchandise and services you provide, the dimensions of your business, and the physical setup of your business. Before discussing your options with an insurance agent, feel free to dive into some research to get a feel for what your options are. In addition to obtaining the recommendation of a trusted insurance agent, reading up on your options will leave you feeling more prepared than most (especially after reading this article).
Getting an insurance quote has never been easier than with LoPriore Insurance Agency. Because we work together as a team to help our customers get what they need, you can contact us at any time to receive personal assistance. Work directly with one of our friendly, helpful agents to get the best rates and policies that work for you and your business. For more information, don’t hesitate to contact us today.
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My sister and I are thinking of opening up a cookie shop together this year and are wondering what kind of insurance we’d need as a small business. It’s great to know that we should make sure to get general liability and property insurance, as well as worker’s compensation coverage once we can hire employees. I’ll talk with her soon and make sure we find business insurance when the time comes.
Thanks for your comment we are a full-service independent insurance agency that loves helping people make good decisions when it comes to insurance. Contact us anytime for more assistance!