5 Quick Tips to Purchasing the Best Small Business Insurance

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Small business owners have plenty to worry about, and unfortunately, catastrophic events are one of those things.

That’s why all small businesses need insurance. Insurance feels like an unnecessary expense, but it can be the survival lifeline when things get bad. It helps business owners cover accidents at the workplace. It protects a business’ assets if it ever finds itself on the wrong side of a lawsuit and covers any risk associated with the business.

That monthly small fee could cover a significantly higher payout one day. If that day comes, a small business owner will be happy he or she had insurance.

Small Business Insurance

Small Business Insurance: 5 Tips For Choosing The Best

Of course, picking out the best insurance is no easy task. With a myriad of choices and programs out there today, finding the perfect insurance can be like finding a needle in a haystack.

There are countless stories out there of businesses purchasing insurance they think covers them in all situations, then to find out that it doesn’t cover business-interruption, or some other kind of damage.

“Generally speaking, small business owners are not completely aware of the coverage they have or the coverage they need,” Steven Spiro, an independent insurance agent told the New York Times.

So, what needs to be known when purchasing business insurance? Here are two quick items:

  1. What are the legal requirements? Some states require a business carry insurance, just as drivers are required to have auto insurance. Check with a local Small Business Association to see what’s required in a specific state or county.
  2. What type of business do you run? The type of business that an owner runs can determine what type of insurance is required. Also answer how many employees you have and what type of work each of them does. It sounds specific, but knowing this information can help business owners determine which type of insurance is best for that business.

Of course, a main concern about small business insurance is the cost. What is a small business owner to do?

According to a Xero small business guide on business insurance, it pays to shop around.

“Talk to a few brokers to get a feel for the type of coverage available to you and how much it’s likely to cost. If you don’t know which brokers to choose, ask for recommendations from friends and business associates.”

To find good insurance, you’ll have to find a good insurance broker, or salesman.

Independent agents are a good place to start because they tend to work with several insurance companies. And because they are paid on a commission, they’re determined to earn a small business owners’ business. Of course, this can be a little dangerous, because some brokers might play favorites with certain carriers and push a business owner toward a higher priced insurance company.

Once this process wraps up, it’s time to determine the level of coverage and shop around. Here are some tips to remember during that buying process:

  1. Several carriers might offer packages and discounts when buying multiple forms of coverage. Be aware.
  2. Customer service is important. If a business owner ever has a claim, they’ll want to deal with positive customer service.
  3. What kind of reputation does the carrier have? Insurance companies can fold overnight, so go with a company that has a strong reputation.

Picking out insurance can be difficult and cumbersome, but that patience comes in handy in the long run. Doing the proper homework can be a huge benefit down the road.

Top Five Professional Indemnity Insurance Facts

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[The following is a guest post by Construct A Quote]

Professional indemnity insurance is a must for people in business – selling either their skills or knowledge. Also known as PI insurance, it protects a business against claims made by a third party or client, for damage or loss. This might happen if the business owner was found to be negligent in some (or all) of the services the business provided, or if the individual made mistakes in their work.

Top Five Professional Indemnity Insurance Facts

Professional Indemnity Insurance Is A Legal Requirement For Many Businesses

In fact, professional indemnity insurance is a legal prerequisite for many professions, to carry out their business legally. This includes accountants, solicitors, mortgage intermediaries, brokers, financial advisers and insurance advisers.

Increasingly, many consultants and agencies are choosing to take out professional indemnity insurance to protect their business, along with designers. This can include those in the contingent workforce, as well as those who are responsible for paying self employment tax.

Customers And Premises Both Need Cover

Another valuable type of business cover is public liability insurance, which covers the legal costs and any resulting damages from cases arising from death, injury or damage to property, on your business activity premises.

Public liability insurance is essential if you have customers on your premises, for example if you run a shop. Again, public liability insurance is a legal requirement for some businesses, including sports centers and riding stables.

Employees Must Be Covered As Well

Employers liability insurance works in a similar way, but helping businesses meet costs for legal fees and damages for employees who are hurt or made ill at work, when the employer is at fault. One fact many people don’t realize, is that employees can still claim for compensation if the business has gone into receivership or liquidation. This makes employers liability insurance compulsory, for at least £5 million of cover, although many insurance providers will offer employers liability insurance automatically for £10 million or more.

There are cases for exemption – if the business isn’t limited, if you just employ close family or are the only employee – the insurance is no longer legal.

You’ll Need To Show Risk Management

Before an insurance company will grant coverage, they will expect to see that the business has processes and guidelines in place to reduce the risk of a claim. Your insurance adviser can give advice on what these processes should look like and there are specialists who can help you present your risk correctly.

Good project documentation is an ideal way to manage risk of claims. Set out terms in contracts with clients, keep a comprehensive incident ledger and deal with any complaints fully as they arise, according to a policy.

Your Business Must Be Properly Covered

With all professional indemnity insurance, cover is granted on a claims made basis. So this means the policy will only cover those claims made whilst it’s live. This means that you should continue with a ‘run off’ cover after you plan to retire or close your business, in case any claims relating to the business operation are made by customers or employees at a later date.

Similarly, if you are looking to change your insurance provider, you’ll need to get agreement from the new provider that they’ll accept any claims from prior incidents, or arrange run off cover.

Remember too, that this is a specialist area of insurance and as such it may be valuable to go through a specialist advisor who can help you ascertain the correct requirements for your business and organize appropriate cover amounts.

In the field of insurance, there is no saving to be made from cutting corners – the legal and financial implications of inadequate insurance are too grave. Speak to an advisor with demonstrable qualifications in the field, ideally registered with professional bodies in the field and recommended.

photo by jscreationzs

Trying To Save Money On Car Insurance? Here Are 5 Things You Are Doing Wrong!

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[The following is a guest post on behalf of Cheap Car Insurance]

One of the most frequent mistakes car owners make is overpaying for insurance coverage. There are several reasons that people don’t save money on car insurance. Here are some of the most common:

5 Reasons You Do Not Save Money On Car Insurance

Buying Too Quickly

Often, people don’t even think about looking for car insurance until the last moment. Then, they are in a rush to get coverage, and fail to shop around. Taking the time to research can help save money on car insurance.

Buying Only Name Brands

Sometimes, people think that only the big name insurance companies are reliable. This is not true. Most states regulate insurance companies closely. If a company is licensed to do business in your state, it has passed the state’s requirements (this is similar to finding a gas safe engineer).

Sometimes the lesser-known companies offer great coverage and still allow you to save money on car insurance.

Not Asking For Discounts

Most insurance companies offer discounts for various reasons. In many cases, you can get discounts for being a homeowner, or a safe driver. Some companies offer discounts for safety features on your vehicle or for driving a hybrid. Others give discounts to minors with good grades. There are even discounts for belonging to certain groups such as AARP or AAA.

Be sure to ask what discounts may be available for you, and you can save money on car insurance without much effort!

Keeping The Same Company For Years

If you automatically renew your insurance with the same company year after year, you may be overpaying. Failure to check out the competition can cost you money. Typically, your insurance rates will increase every year.

It is always a good idea to check to see if you could get cheaper coverage with another company.

Buying More Or Less Insurance Than You Need

It is important to determine how much coverage you actually need. Most states have a minimum amount of insurance that you are required to carry. For some, this is all that they need. For others, more coverage is better.

If your car is new, you will want to make sure that it is covered for collision and comprehensive damages (although you still may not be able to file a claim for damaged money if you’re in an accident ;-)). If you have an older car, you may only need to be covered for liability.

Another consideration is the amount of deductible you choose. If you can afford to absorb the costs of minor damage, you do not need to pay extra for a low deductible. Choosing a higher deductible can save money in the long run.

In Conclusion

Once you have determined your needs, the next thing to do is to get a list of all of the licensed insurance providers in your state from the department of transportation. Next, go online and check out these companies. Look for comments from past clients and general reputation. Also, look for customer service and ease of contacting a representative.

Next, request free rate quotes from several cheap auto insurance companies. Be sure to do an equal comparison. Do not request one level of coverage from one provider and a different level from another one. By doing this, you will be able to make an informed decision and be satisfied that you have chosen the best, most cost effective insurance that meets your needs.

photo by Bill Longshaw