Business Insurance

To individuals outside of the insurance industry, the extensive lists of business insurance policies and plans can seem overwhelming and confusing. They worry about excessive costs and are unsure about what level of coverage they actually need. However, if a few simple points and facts are kept in mind, the whole process can be made much simpler and become easier to understand.

Shop Around

As with any major purchase, business owners should request quotes from a number of different insurance providers before settling on one policy. In addition to giving you an idea of cost and extent of coverage, this will also give the purchaser a chance to observe how helpful the business insurance advisors are and how good their customer service skills are. This ensures that you’re working with agents that can handle your needs and fit your organizational structure.

Never Underinsure

Despite the fact that more people are realizing the importance of having their company properly protected, there are still a number of organizations that are severely underinsured. This is often due to a number of things including:

• A reluctance to pay premiums
• Valuation costs
• Inappropriate advice from an insurance advisor
• The belief that nothing bad will happen to them or their company

Underinsuring a business can have catastrophic consequences. If insurance cover is less than the value of a business’s assets, and that organization is hit with a fire or a flood, they will find it very difficult to get back on their feet. Many business owners will also not be aware of the ‘underinsurance’ clause, present in most business insurance policies. If somebody’s possessions are underinsured, this clause can result in a substantially reduced payout when a claim is filed.

Keep Track

You want to keep track of assets to ensure the business is adequately insured. The best way to avoid underinsuring a business, and the financial implications if something should go wrong, is by correctly assessing company assets and keeping the insurance company updated with any changes.

Over time a business might receive additional stock, purchase new equipment and refurbish its premises. This means that the company could be worth a different amount from one year to the next. The value of the office space must also be taken into consideration if owned by the organization.

It’s important to keep a checklist of business assets so you don’t underinsure. Checking on how much each item would cost to replace, by contacting past and current suppliers, will give a good idea of how much the business is worth. A professional valuer can supply a figure for any property that is owned.

Consider Purchasing Business Interruption Insurance

It is important to remember that it is not just physical items that business owners need to think about protecting. A company suffering a substantial setback, such as a fire or flood, can take many months to get going again. Profits will be affected and the employer might find it difficult to continue paying for staff and supplies. They may even need to rent alternative premises if the usual ones have been damaged in some way. Taking out a business interruption policy can give business owners some leeway when the unthinkable happens.

Business interruption insurance provides reimbursement for lost profits and necessary continuing costs over the indemnity period, which most companies are now setting at 12 months. Having that extra support can mean the difference between a company recovering and shutting down. A lot of business owners avoid it as they assume it will be too expensive but the annual outlay is actually a lot less than would be expected.

Keep in Regular Contact with the Insurance Company

Insurance companies should contact their business clients every six months to have a chat and to ensure they are still adequately covered. However, if a business owner has any concerns in the meantime, they should not think twice about picking up the phone. Most advisors are more than happy to answer any questions or talk through possible policy options. The peace of mind that comes from having business insurance perfectly tailored to a company’s needs makes that ten-minute chat more than worthwhile.

Get the Coverage You Need

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