Business Insurance for You

Posted on February 10, 2016 By

When starting out a business there is a lot of optimism. An entrepreneur believes that everything will be alright. Unfortunately there are some events that can disrupt the day to day business activities and if the entrepreneur has nothing to fall back on then that is the end of the business. Those who have insurance tell a different story.

Why insurance is important

It’s the law!

If you employ anyone, insurance is a legal requirement. Employers’ Liability cover protects your staff and labour only sub-contractors in the event of an accident or injury at work for which you are legally liable. By law, if you have employees, you must have at least £5 million cover.

In a business-to-business setting, an insurance policy acts almost like a credential. By having a high level of cover you are demonstrating that you are a respectable business which takes health and safety very seriously, and that you fully understand your own responsibilities.

You might consider the risks that your business faces to be small or even affordable, but if this is the case then there is a very good chance that you are underestimating them.

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Business insurance is a term used for all types of insurance coverage for business owners against losses. This insurance covers your premises, equipment, employees and even legal claims. There are different types of business insurance for a business owner to choose from.

The main types of business insurance you should consider include:

Property and Casualty Insurance: Property insurance covers the physical location of the business (even if it is rented or leased) and its contents from things like fire, theft, flood, and earthquakes—although read the terms carefully to make sure they include everything you need. Casualty insurance, on the other hand, covers the operation of the business, but the two are usually grouped together in policies.

Commercial Auto Insurance: Commercial auto insurance covers your business for loss or damage to vehicles used by your business and for damage to others caused by your business vehicles. Note that vehicles used for business are not covered under your personal auto insurance policy even if a vehicle is used for both business and personal purposes.

Liability Insurance: Liability insurance covers you in the event someone sues you for negligence, which can occur, for instance, if someone falls on your property.

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Your business will benefit a lot when it is insured. You can go on with business as usual knowing that no matter what happens unexpectedly, it can be recovered from. There are certain steps to take in order to choose the insurance cover that best suits your business.

  1. Assess Your Risks. Insurance companies determine the level of risk they’ll accept when issuing policies. This process is called underwriting. The insurance company reviews your application and determines whether it will provide all or a portion of the coverage being requested. Each underwritten policy carries a premium and a deductible. A premium is the price you pay for insurance. Premiums vary widely among insurance companies, and depend on a number of risk factors, including your business location, building type, local fire protection services, and the amount of insurance you purchase. A deductible is the amount of money you agree to pay when making a claim. Generally, the higher deductible you agree to pay, the lower your premium will be. However, when you agree to take on a high deductible you are taking on some financial risk. So, it’s important to assess your own risks before you go shopping.
  2. Shop Around. The National Federation of Independent Businesses provides information for choosing insurance to help you assess your risks and to make sure you’ve insured every aspect of your business. The extent and costs of coverage vary from company to company. Some brokers specialize in insuring specific types of business, while others can connect you with policies specific to your business activities. For example, if you operate a tow truck service, you’ll want to find an agent that can help find policies that specifically cover automotive service businesses. Often specialist brokers can get you the best coverage and the best rates.

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