What To Look for in Business Insurance

Five things to be aware of and consider when applying for insurance for your business

Certificate of Liability Insurance | Construction Pro Tips

As a busy small business owner or independent contractor, you know that you need insurance. Having insurance protects your business if anything should go wrong, and in many states you can’t even get a business license if you don’t have basic business insurance.

The trouble is, that taking out an insurance policy can be confusing and stressful. Perhaps you feel like you never have enough time to apply for insurance, or you’re worried that you could end up paying too much or get an insurance policy that doesn’t cover your needs

That’s why we’ve brought you 5 quick tips about what to look for in insurance, so that you’ll feel confident that you made the right decision.

An Insurance Application Process That Is Easy and Fast

You don’t want to spend hours on your insurance application. You certainly don’t want to have to make an appointment to meet with an insurance agent, or even have to find a quiet place and time to make a phone call. That’s why you should look for an insurance company that lets you apply entirely online. An online insurance application means that you can complete it anywhere, anytime. It’s also much quicker to apply online – taking as little as 10 minutes.

Don’t forget that you’ll be able to apply for insurance faster when you can easily understand the application. Some insurance applications are very long and complicated. You’d need to go to an insurance professional to be able to understand them. But other applications are clear and simple. In general, if an insurance company tells you that their application only takes a few minutes, it means they put in effort to make it easy to understand.

Insurance That Covers What You Need

You want enough insurance to cover your circumstances, but it’s just as important not to pay for insurance that you’re unlikely to need.

Here’s an overview of different types of insurance you might need:

  • General liability insurance is the most basic type of business insurance. It covers you in case someone gets injured on your premises and demands that you pay their medical costs, if you accidentally damage someone’s property, and in case someone sues you for slander or libel. In most states, you need this insurance to get a business license.
  • Comprehensive liability insurance includes general liability insurance, plus coverage for settling judgments and lawsuits.
  • Product liability insurance is only for businesses that sell products, in case a customer sues you for damage caused by your product, or for selling a defective item.
  • Professional liability insurance covers you if a customer complains that you were negligent, made a professional mistake, or sues you for malpractice. You probably need it if you run a service-based business, like a painter or accountant.
  • Commercial property insurance and home-based business insurance cover damage done to your business premises, or your home, if you work from home.
  • Worker’s compensation insurance is mandatory if you have employees. It pays out if your worker is injured on the job.
  • Equipment insurance covers your expensive equipment in case it gets damaged or stolen. If your business has very little high-cost equipment, you can probably skip this one.

It’s quite likely that when you start your business, you won’t need every type of insurance. By picking an insurance policy that lets yo choose which insurance you buy, you can save money on the policies that you don’t really need.

It’s also important to check the amount of coverage you’re paying for. You need a policy that will pay out enough to cover your costs, but you don’t want to pay for a massive insurance policy that you’ll never need.

Insurance With a Fast and Simple Claims Process

You don’t chat to your insurance company often, but when you do have to speak to them, you really need it to go smoothly. Look for insurance with a simple and fast claims process, so that if you have to make a claim you can do so quickly, and receive your money as soon as possible. It makes a huge difference to speak to a customer service agent who is helpful, answers the phone quickly, and knows their stuff.

Insurance companies don’t always tell you about their customer service ratings, but there are ways to find out. You can search online for customer reviews, or use their Twitter handle to see if anyone has shared a complaint on social media.

Insurance That You Can Rely On

Even insurance companies can fail. If that happens, you’ll lose all your insurance premiums that you’ve paid so far and be left uninsured. Look for an insurance policy that’s backed by plenty of assets. A high rating from a ratings firm such as A.M. Best is also a good sign.

Insurance That Is Affordable

You understand that you have to pay your insurance premiums, but you don’t want to pay more than necessary. Do a little research before you apply for an insurance policy, so that you can check that the premiums are more or less the same as the rest of the market.

Make sure that your insurance policy has no hidden fees. Many insurance companies charge you extra to get a copy of your Certificate of Insurance, or to add an Additional Insured. It’s a bonus if you can find a insurance company that lets you pay your insurance premiums monthly, instead of requiring a single upfront payment each year. This helps you spread your payments across 12 months and eases your cash flow.

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