Insurance is one of those things that business owners hate to think about, but that is actually quite important. As a business owner, you probably know that you need some insurance for your own peace of mind, and you may be required to have some in order to operate in certain areas, visit certain venues, or otherwise perform your day to day trade.
There are many different policies to choose from. Indeed, there are far more policies that you could take out than there are ones that you are legally required to have. You should not be thinking about insurance in terms of “what does the law require me to have”, though. You would be better off if you thought about it in terms of what you really need, and what risks your business is exposed to.
Most landlords will require that businesses have a general liability policy before they even allow you to take out a lease. If you have clients that are major corporations, then you will need insurance too – in order to even have your tenders and proposals accepted. Many small business owners overlook insurance needs, and this is a bad thing because it could be closing the door on a lot of opportunities.
Business Owners Should Manage Risks
One way to look at insurance is that it is a form of risk management. You do not want to be letting risk manage you – it is important that you take care of the risks that you are facing. It’s the things that you don’t think about, and that you don’t plan for, that are going to do you the most harm.
What Insurance Do You Need, and How Much?
There are a few key types of insurance that you should look at:
– General Liability Insurance: This is the insurance that will cover products, premises operations, completed operations, and other issues. If someone gets injured on your property, or something that you do causes damage to someone else’s property, then that’s where General Liability Insurance could cover you.
– Errors and Omissions Insurance: This is a form of professional liability cover that helps to ensure that if you are presenting yourself as an expert and your work goes wrong, then you will be covered for your defense costs and legal fees. It is worth getting $1 million in professional liability cover, or more, if you offer advice or consulting services.
– Commercial Excess Liability Insurance: This is an additional piece of cover that can go on top of your general liability policy, and that will give you more coverage. Since it is affordably priced, at around $300 for $1 million extra cover, it is worth getting.
– Auto Insurance: If your employees drive vehicles that are owned by your company, then you should have commercial insurance for them. You should add a non-owned automobile rider for hired vehicles, because if an employee rents or borrows a vehicle for business reasons (something that is common), then standard insurance may not cover them.
– Worker’s Compensation: If you have employees then you are legally required to have this cover. The pricing for this cover is regulated by the states that you are doing business in. You should note that this insurance is for employees, and for contractors – if you do not have a certificate of insurance for each subcontractor or 1099 then you will find that you are liable for them on your own policy. Worker’s compensation policies are audited, and if you cannot prove that those contractors have insurance, then you will need to pay for them.
There are many other types of insurance – some are industry specific, such as medical malpractice insurance, and some are more general, such as insurance against bank fraud or cybercrime.
You do not necessarily have to insure yourself against every single thing that could possibly go wrong, but it is good practice to have extensive coverage. You can get quotes for different packages online, and you may find that if you get several packages – such as professional indemnity, equipment, and employer’s liability, all from one company you could get a significant discount.
Don’t delay looking for an insurance package. You can get millions of dollars’ worth of insurance for just a couple of thousand pounds per year, and it could be the thing that saves your business in the event that something goes wrong. Insurance is not just about ticking boxes, it is about limiting the risk to which your business is exposed. In the event that something does go wrong, you will be glad that you took the time to protect your company, and that you were able to cover the claim.
At the time that your business needs insurance from Procom Insurance Company, you will not be able to take it out. Just like you can’t get cheap health insurance when you have a pre-existing condition (but your insurance would cover that condition if you had the cover in place before you developed it), you can’t get insurance to cover something that has already been damaged or stolen, or to cover a claim that has already been made. You need the policy in place before anything happens – and the policy doesn’t have to cost the earth. So, start shopping around today while your business is in a good place, and work with the companies to build a package of cover that will suit you.
Assess your risk realistically, and then buy adequate cover. There is no need to waste money over-insuring, but by the same token it would not make sense to take out a policy that will not meet the needs of any liability, because you would be only marginally better off for having it. Your broker will be happy to discuss the options with you and recommend packages that are realistic for the size of your business, the work that you do, and the industry that you are operating in, as liabilities can vary massively.
