Juggling affordability with quality products and services is a continuous priority for business owners. However, when it comes to small business insurance, the question arises: What is the cost for protecting your livelihood?
Regardless of the industry that you operate in, risk is everywhere. Insurance cover helps you mitigate risk and allows you to make business decisions without being exposed to losses that you cannot recover from. From protection against theft, law suits to cyber attacks, business insurance helps to protect small to medium enterprises (SME) and allows them to continue daily operation in spite of what might happen.
This article will explore the important questions you need to ask when you search for SME insurance.
Understand Your Insurance Needs
Anyone in the market for business insurance should first understand their needs before they reach out to potential insurers. You need to know the following about your enterprise:
- The nature of your business
- The asset of your business
- Your unique industry risks
- Your responsibilities
If your business relies heavily on human resources, you might consider giving them medical aid cover, life cover or disability cover.
When you start conversations with insurance brokers, you need to mention all these factors, and be sure to disclose every item that needs to be covered. There is a variety of insurance types available, so understanding your business will enable them to provide you with the best cover possible.
Characteristics to Look for In Small Business Insurers
Comprehensive Coverage: Although it is not a necessity to have different assets or parts of your business covered by the same insurer, it can be beneficial to do so. Some companies offer bundled coverage, meaning that you can cover multiple aspects of your business under one premium. Furthermore, some companies might only cover some business risks and not all that you require for your business.
It’s important to note that industry-specific insurance is available.
Tailored Solutions: Some businesses functions well with a standard package devised by an insurance company, but others might need tailored solutions.
Competitive Pricing: Pricing shouldn’t be the end all and be all when making your decision, although it must be considered. Find an insurer who is able to give you coverage for your needs that is sure to cover them in full while balancing the monthly costs.
Risk Management Support: Great customer support is priceless! When comparing quotes from insurers, consider the support they offer for risk management and claiming. Are you left on your own to figure it out? Does a consultant carefully work through your business needs with you?
Manage Business Insurance Costs
When looking for small business insurance, there are multiple ways to keep the costs of your premiums low. According to Business Insurance Made Easy, entrepreneurs can take the folowing into consideration:
Bundle Policies: As mentioned earlier, some insurers offer discounts if you purchase multiple types of coverage from them. By using these bundled policies, every SME can attempt to lower their overall insurance costs.
Implement Risk Management: Mitigating risk means that safety procedures, protocols and safety measures are implemented across the business to insure that threats are minimised or removed. These risks are anything that can cause your business to claim from the insurance company. The lower the risk, the cheaper the premium you need to pay.
Regular Review and Updates: It will be an ongoing task to update the insurance company about changes in assets such as aquireing or selling. Any business changes need to be clearly documented so there is no unnecessary items on your cover, or items that’s not listed at all.
Special Considerations for Home-Based Businesses
SMEs can mean anything from fifty employees or more, but it also includes the micro or small businesses that start from home. This is practical, cost-effective and a great way to start your brand, but it makes business insurance tricky.
Although you have stock, limited staff, equipment or machinery operating in your house, homeowner’s insurance doesn’t cover these items. You will either need to look specifically at a policy that was designed for home-based businesses, or how you can add your business assets to the homeowner’s policy.
You will need to confirm that which ever policy you choose covers both your equipment and inventory is covered. This is to protect your business against theft or damage. Particularly important to equipment is technology that is vulnerable to cyber attacks and data breaches. Furthermore, if you have clients visiting your business frequently, you need insurance that includes injury or damage claims.
Lastly, if you have a business vehicle that you use, including a personal vehicle that is vital to the survival of your business, consider commercial auto insurance.
Now that you know what questions to start with when you investigate potential insurance providers. Familiarise yourself with the types of insurance available to know what will suit your needs best.
If you would like to find out where to get business cover, here are 6 Business Insurance Platforms for SMEs.
