Running a business is tough, and you know that it’s important to carry the right kinds of financial protection. Some insurance policies are required by law, and other policies are optional, but they safeguard your business. Different forms of insurance prevent unnecessary loss exposures that could put your company’s finances at risk.
Why Get Insurance
If you are in the business of writing mortgages, for example, your state probably has a minimum amount of assets that you must maintain to secure your professional license. It also might require you to carry insurance. One example is when a client sues you for work that you performed and you will rely on your professional liability insurance to cover the legal costs. Another example is that one of your employees hurts someone while driving your company vehicle. You rely on commercial vehicle insurance to protect yourself as the vehicle owner. Owning a business is full of risks, and insurance helps you manage risks. You can’t afford to pay for all of these scenarios and many more in cash. What happens when you decide that you are paying too much for your current insurance premiums? You know that you have to consider a new provider of insurance for your small business.
Get the Facts
One of the first things that a business owner may do when considering switching insurance companies is go online to make price comparisons. Since these only give sample quotes and may limit your choices to the biggest companies, you could be missing out on forming a relationship with a great insurance company. Working with an insurance broker is an option that opens up your opportunities beyond what your Google search reveals. Many insurance brokers write policies on behalf of multiple companies, and they can help you find the right premiums for your business. You need more than just general business liability insurance. You want to have every kind of coverage that relates to your business and that sufficiently limits your loss exposures.
Catastrophes are Real
Another reason that you need the right policies and coverages from a business insurance broker whom you trust is the realization that catastrophes are real. Unexpected events can cripple your company. A small business is most vulnerable to risks only because of its limited financial resources and typical absence of shareholders. Some small firms even create their own captive insurance company to put money away for risks, which include “data breaches, loss of key employees or customers, product warranties, recalls, copyright infringement, equipment breakdowns, regulatory changes, lawsuits–even cyber risk.”
How Much You Need
The types of risks that face your company really vary according to the business model. For example, if you have a physical location that provide goods or services directly to customers, your business could be temporarily shut down if there is a natural disaster. If your business operates entirely on the Internet and your data center is breached by hackers, you need business continuity insurance. Either scenario will require time to get the business up and running again. Business insurance helps you to make a claim for the type of loss that you incur. Even if you have to temporarily use cash reserves to handle these types of disasters and to restore business operations, you could get reimbursed from various policies. The key is having the right policies in effect when a catastrophe occurs.
Before you switch brokers, consider what you like about your current insurance providers. Determine what you could purchase that might be better for your business. You might need more of this type of insurance and less of that type of insurance. It’s the broker’s job to make the premiums affordable for your firm without asking you to sacrifice what you really want. For more details on working with a new insurance broker, please contact us today.
Rob Macoviak is the President of Oyer, Macoviak and Associates. Oyer, Macoviak and Associates is the oldest independent insurance agency in Boynton Beach and has been in business since 1953.