Running a successful business is never easy. That is why many startups usually fail within the first few years of business. Only a small percentage of businesses usually succeed. If you are a business owner, there are steps you can take to boost your chances of success. One of these measures is insuring your business against every possible risk that may arise. The Smart Business Insurance company has a wide range of insurance products to suit the unique needs of different types of businesses. To identify the best insurance policy for your business coverage needs, below are some of the main factors to take into consideration:
1. Type of Insurance
There are many types of insurance policies that are designed to meet the coverage needs of different types of businesses. There is workers compensation insurance, business income insurance, public liability insurance, commercial property insurance, commercial vehicle insurance any many others. Depending on your coverage needs, be sure to look for policies that can meet your coverage needs.
2. Liabilities Covered
Insurance policies only cover the liabilities listed in the inclusion clauses. If you are looking for business property insurance, for instance, make sure the policy covers furniture and fittings, computers, stationery and every other valuable property that may be in the business premise. The policy should cover these assets against theft, fire damage, storm damage and other types of risks. Be sure to pay attention to what a policy covers to ensure you buy an insurance policy the offers sufficient coverage. There is nothing as disappointing as buying an insurance policy thinking that it protects your business against every possible liability only to discover that there is a coverage gap later on.
3. Extent of Liability Coverage
The coverage limit for each of the liabilities listed must be considered. For instance, if your business assets are valued at $1.5 million, you should purchase a business property insurance policy that offers at least $1.5 million in liability coverage. In case the business premise is razed down by a fire, you will be compensated fully for your losses.
The premiums charged by insurance providers is usually a measure of the risk they’re exposed to. That is why premiums usually rise with the value of assets being covered. The level of risk exposure also affects the premiums charged by an insurance company. The liability coverage limit also affects premiums, so the higher the coverage limit, the higher the premiums will be. It is crucial you compare the level of coverage offered by a policy hand in hand with the premiums charged for the policy. This will help you get the best value for money.
5. Exclusion Clauses
Every liability that is covered by a policy is listed under the inclusions while the exclusion clauses list everything that is not covered. Insurance companies can reject a claim if the liability arose from certain circumstances that are not acceptable to the insurer. For instance, an insurance company may reject a claim if the fire that damaged business property was started intentionally by an employee. Similarly, if a fire in the business premise could have been contained, but the fire detection and suppression systems were defective, the insurer can reject the claim. Therefore, you need to read the exclusion clauses hand in hand with the terms and conditions of a policy to ensure you know exactly what you’re getting yourself into.
Before you purchase any type of insurance policy for your business, it is crucial you first consult an expert in the industry. This can be a business consultant or an insurance agent. The expert will assess your coverage needs and even help you find the best policy for your needs. This is crucial because you do not want to have any coverage gaps. You also do not want any redundancies in coverage. The expert can also advise you on the amount of liability coverage to carry. Carrying too much liability coverage is a waste of resources while carrying insufficient coverage can expose your business to unnecessary risks. After all, you will have to use your working capital to fill the coverage gap. Fortunately, there are many insurance agents and business consultants in every major city, who can advise you accordingly.