Although we can speak generically about Business Insurance, exact coverage needs, requirements and risk containment will be dictated by the specifics of each individual business and its owners’ risk tolerance.
For instance, a local mom and pop window-washing business earning
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$15,000 per year differs radically from a multi-state fast food franchise, with revenues in the millions and hundreds of employees. The common denominator which forces them both to think seriously about insurance is that each faces the threat of cataclysmic loss if a major lawsuit finds them liable for a large payout.
But obviously their insurance needs differ as greatly as their businesses. In addition, the larger business entity may be publicly owned and answer, by default, to its shareholders and may also be at the mercy of strict governmental regulations.
Before you seek a business insurance quote, you need to know exactly which risks you feel you need protection against and which risks you are prepared to assume out of your own pocket.
RISK FACTORS
Let’s look at some of the standard risks facing all businesses that bring them to consider different kinds of business insurance policies.
1. Employee-related insurance coverage. Most employers, in a bid to remain competitive and attract quality employees, will frequently offer health, dental, disability, and life insurance, or some combination of these. In many instances, an employer will pay a percentage of the premiums and expect some premium contribution from the employee.
2. Worker’s compensation. In many instances, states mandate this coverage which provides for payment of medical bills and reimbursement for loss of wages resulting from on the job accidents.
3. Liability risk. This type of policy covers against claims resulting from general negligence of you and/or your employees while performing jobs for customers. For example, if a swimming pool construction crew damages a property fence or breaks up the customer’s driveway while installing a pool, liability insurance would typically cover such damages.
4. Auto and equipment. Many companies tally millions of dollars worth of equipment used to carry out their business. In addition to liability for damages caused to third parties, insurance can also cover losses resulting from theft, fire, and other factors.
5. Interruption of business. This coverage can protect businesses against any eventuality that would render them incapable of conducting business as usual. One example might be a retail store that cannot operate for several weeks because of a natural disaster such as a flood, tornado, or other such weather-related calamity.
6. General casualty. This type of coverage can be quite broad but it generally encompasses damages to the business itself rather than its clients or other third parties.
As you can see, getting a business insurance quote is not as simple as getting auto insurance or health insurance coverage. You must examine your business, assess its potential liabilities and decide just how much risk you are willing to assume. Anything above and beyond that threshold will dictate the amount and type of insurance you need.
When you go shopping for a business insurance quote, be sure you deal with an agent or broker well-versed in this type of insurance. When it comes to insurance that could protect you against cataclysmic loss, you want to be sure you consult with a professional well-versed and up to date in the latest insurance laws and types of coverage.
In addition, don’t be romanced by price alone. Sometimes paying a higher premium makes sense if it gives you greater security and a relationship with a broker or agent who will be your advocate when and if you need to make a claim.