3. Make sure the insurance agent you pick is knowledgeable about your business's insurance needs. Your agent can tell you what to do to reduce the likelihood of theft, injuries to visitors and workers, and other business-related losses.
How can I save money on my business insurance?
Here are five ways to save money on business insurance:
Shop around.
Prices vary from company to company, so it pays to shop around. An independent broker who specialize in your type of business can get prices from several different companies for you. An agent that represents just one company will only offer that company’s price.
It's also important to pick a company that is financially stable. Check the financial health of insurers with rating companies such as A.M. Best and Standard & Poor’s and consult consumer magazines. You agent or broker can advise you.
Choose a higher deductible.
Deductibles represent the amount of money you pay before your insurance policy kicks in. The higher the deductible, the less you will pay for the policy.
Buy a package policy.
It can sometimes be cheaper to purchase a package policy, such as a Businessowners Policy (BOP), rather than individual coverages. A package policy provides standard coverages and limits of liability that are appropriate for typical small-to-medium-sized businesses.
Work closely with your agent or broker.
Your insurance professional can provide invaluable advice to help protect your business from unexpected disasters. But you need to keep him or her informed about any major changes in your business. This includes major purchases, expansions or changes in hiring or the nature of your operation. Also, get your agent's advice in terms of disaster planning. Ask what you can do to both reduce risks like fire or work-related accidents, as well as the procedures that should be in place in case your business does suffer a major catastrophe.
Having the right coverage and a well thought out disaster plan can save you money in the long run. It may even save your business from going under.
Ask about ways to prevent losses.
You may be able to reduce your premium for certain coverage by following your insurer's recommendations. These can include workplace safety, disaster preparation, and human resource intervention.
How do I insure my home business?
If you're running a business from your home, you may not have enough insurance to protect your business equipment. A typical homeowners policy provides only $2,000 coverage for business equipment, which is usually not enough to cover all of your business property. You may also need coverage for liability and lost income. Insurance companies differ considerably in the types of business operations they will cover under the various options they offer. So it's wise to ask your agent for coverage options as well as price.
Regardless of the type of policy you choose, if you're a professional working out of your home, you probably need professional liability insurance. Some types of in-home businesses, such as those that make or sell food products or sell home-made personal care products, may have to buy special policies.
To insure your business, you have three basic choices, depending on the nature of your business and the insurance company you buy it from. They are:
1. Homeowners Policy Endorsement.
You may be able to add a simple endorsement to your existing homeowners policy to double your standard coverage for business equipment such as computers. For as little as $25 you can raise the policy limits from $2,500 to $5,000. Some insurance companies will allow you to increase your coverage to higher limits.
You can also buy a homeowners liability endorsement. You need liability coverage in case clients or delivery people get hurt on your premises. They may trip and fall down your front steps, for example, and sue you for failure to keep the steps in a safe condition.
The homeowners liability endorsement is typically available only to businesses that have few business-related visitors, such as writers. But some insurers will provide this kind of endorsement to piano teachers, for example, depending on the number of students. These endorsements are available from most insurance companies.
2. In-Home Business Policy/Program.
An in-home business policy provides more comprehensive coverage for business equipment and liability than a homeowners policy endorsement. These policies, which may also be called in-home business endorsements, vary significantly depending on the insurer.
In addition to protection for your business property, most policies reimburse you for the loss of important papers and records, accounts receivable and off-site business property. Some will pay for the income you lose (business interruption) in the event your home is so badly damaged by a fire or other disaster that it can't be used for a while. They'll also pay for the extra expense of operating out of a temporary location.
Some in-home business policies allow a certain number of full-time employees, generally up to three.
In-home business policies generally include broader liability insurance for higher amounts of coverage. They may offer protection against lawsuits for injuries caused by the products or services you offer, for example.
In-home business policies are available from homeowners insurance companies and insurers that sell stand-alone in-home business policies. This means that you don't have to purchase your homeowners insurance from them.
3. Businessowners Policy (BOP).
Created specifically for small-to-mid-size businesses, this policy is an excellent solution if your home-based business operates in more than one location. A BOP, like the in-home business policy, covers business property and equipment, loss of income, extra expense and liability. However, these coverages are on a much broader scale than the in-home business policy. However, these are much broader than the in-home business policy.
A BOP doesn't include workers compensation, health or disability insurance. If you have employees, you'll need separate policies for these coverages.
Automobile Coverage.
If you are using your car for business activities — transporting supplies or products or visiting customers -- you need to make certain that your automobile insurance will protect you from accidents that may occur while you're on business.
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