Insurance Advisor at Oliver L.E. Soden Agency, Inc

5 Tips for Buying Business Insurance

Running a small business requires a significant investment on your end. Business insurance is how you protect this investment. With an insurance policy, you minimize financial risks such as the death of a partner, an injured employee or a natural disaster.


Choosing the right insurance coverage isn’t always clear, however.


To help minimize risk and acquire enough protection, follow these 5 tips when buying business insurance.


1. Assess Your Risks


When issuing you an appropriate policy, insurance companies will want to know your level of risk. This process is called underwriting.


Essentially, you fill out an application, and the underwriter reviews it to determine if they will provide you with some or all of the requested coverage. Each policy includes a premium and a deductible.


Your premium is the amount you pay each month for the insurance. The deductible is the amount you agree to pay if you need to file a claim. Assessing your risk will help you make a decision as to how much you’re willing to pay for your premium and deductible.


2. Obtain Several Quotes


It’s highly recommended to shop around for business insurance, which you can do efficiently once you have assessed your risks. Costs and coverage vary from one company to the next, so you never know what you can get unless you obtain several quotes.


You may also want to reach out to a broker who specializes in business insurance, as they can connect you with policies that are specific to your business.


3. Work with a Licensed Agent


Your insurance agent is an important person, so make sure you are comfortable and happy working with them. If you have questions or concerns, or need to file a claim, this is the person you’ll be talking to.


Ideally, you want to work with an agent who has a license. State governments regulate the insurance industry, so you can refer to their databases for a list of reputable, licensed agents in your area.


4. Consider a Business Owner’s Policy


A business owner’s policy (BOP) is a package that includes typical coverage options that, when combined, often result in lower premiums. You can also purchase your insurance separately, but you may find that purchasing separate policies from separate insurers will have you paying more out of pocket.


Generally speaking, BOPs cover property, general liability, vehicles, business interruption and other common business issues. BOPs also streamline the insurance buying process and save money. They are certainly worth considering.


5. Review Your Policy Each Year


You should review your policy annually to ensure that you have the right coverage for your business. Businesses grow, which mean so do your liabilities. Keep the lines of communication open with your agent so that you can discuss changes in your business and how they may affect coverage.