Business insurance 101

• Knowing the Basics of Business Insurance

  You cannot operate a business without having some type of business insurance. You shouldn’t even think about trying to. If your business is not insured and something happens, not only could you lose your business, but there is a chance that the resulting lawsuit could also cost you all of your personal assets as well. The better you understand the basics of business insurance, the more likely it is that you will find a plan that protects your business but which is also affordable.

• Don’t assume that just because your business is insured that you don’t have to worry about anything. Insurance companies are businesses too. Their goal is to make money. Each time they have to pay out on a claim they aren’t making any money, so when you make a claim they are going to look very carefully at the situation and see if there is any way they can refuse to pay. The most common reason that an insurance company will refuse to pay on a claim is because they believe that you were negligent.

• One of the mistakes many business owners make is thinking that all business insurance plans are all the same. Nothing could be further from the truth. Just like all businesses are different, the insurance needs of each business are different. Some insurance companies will even deny coverage to some types of businesses because they do not have adequate plans. Business that are considered a big liability risk, such as a charter fishing company, or with unique insurance needs, such as agriculture businesses, usually have to look for specialized insurance companies.

• You aren’t locked into the current cost of your plan. If your insurance company wants to, they can raise your monthly premiums, though they do have to give you some advanced notice. The reason that insurance companies do this is because they feel that your business is a higher risk than they first anticipated. The more frequently you make insurance claims, the more likely it is that the insurance company is going to raise your monthly premium.

• If you have discovered another insurance company who has either managed to set you up with a better plan, or who is giving you a better price, you are going to want to make sure that you pay very careful attention to the dates. You never want your business to be uninsured, not even for a day. Make sure that the new plan is going to start before you cancel your old plan.

• You need to keep all the paperwork that you have in a safe place. In addition to scanning it and saving a copy to your computer, you should also make sure that all of the contracts are stored in a fire proof safe that you keep locked.