5 Must-Dos When Buying Business Insurance

When you run your own business, you probably know a ton about your day-to-day duties and not-so-much about ways to protect your company.

Always work with a trusted insurance agent who acts on behalf of your own best interests, and keep these five must-dos in mind as you search for the perfect coverage to fit your budget.

1 – Think Seriously About Potential Income Loss

Sorry to say, it happens, as we’ve seen with the Coronavirus pandemic. Causes beyond our control can impact our ability to keep our business running. For example, a fire or other types of damage to your physical business (which you’ll cover with a Property policy) can mean you’re not able to operate your business. When your business isn’t open, you’re not bringing in money.

Business Income coverage can replace lost income and pay for some expenses, such as rent.

2 –Revisit Your Coverage as Your Business Grows & Evolves

Businesses change over time, increasing or decreasing their number of employees, or adding new products or services to their line-up. Some business changes will impact the type or amount of needed insurance. To ensure your business is adequately covered, talk with your agent before your policy renews and tell them about any changes with your company.

My favorite part of being in insurance is getting to talk with business owners regularly and being part of their team, making sure we have the right coverages in place as their business evolves.

3 – Resist Lower Limits

Going with a lower limit on general liability is tempting, yet I know from experience that businesses of all types get sued. There is no way to predict a lawsuit, and for a small company, being sued could easily put you out of business. Also, some entities like vendors, landlords, or government agencies might require a minimum limit of $1 million or more to sign a contract with you. Don’t be intimidated by what seems like huge numbers. Your agent can shop around for coverage that fits your budget while making sure your limits don’t limit your business.

4 – Shop Around & Don’t Buy on Price

Just like choosing lower limits or lower deductible amounts, picking a policy because of its low price could leave your business unprotected. You must shop around for insurance and understand the proposals provided. I love pulling quotes from various insurance companies and helping my clients understand what each policy does, and does not, do. Our entire business models is built on offering access (and quotes) from multiple carriers, to get you the best coverage and price. Hopefully, you have an agent who will take the time to explain to you the various policies and what you get for the premiums you pay. 

5 – Avoid Underinsuring Your Property

Did you know that most policies for property coverage have one of two clauses: coinsurance clause or an agreed value provision? If you fail to maintain a minimum amount of insurance and a loss occurs, the full amount of the loss may not be covered by your provider.

Also, keep in mind that a policy with replacement cost coverage will not cover the entire cost of repair or replacement if the costs exceed the limits of the policy. If that happens, your company will have to pay for the remaining costs. In the long run, it doesn’t pay to underinsure your property to save money in the short-term.

You have a full plate just running your business so find an agent you trust who will pull multiple quotes from trusted carriers, and who will explain, apples to apples, what’s covered and what’s not covered.

I love helping business owners determine the perfect coverage for their unique circumstances. I’m a business owner, too, so I understand completely how insurance can seem complex.

I can make buying business insurance simple, though, so please give me a call (602.456.9122) or email anthonywashington@myraisinbread.com. I’d love to learn more about your business and what I can do to contribute to keeping it moving.

Anthony Washington has 30 years’ experience in the insurance industry and has now created RaisinBread, an insurance tech company that makes commercial insurance simple for business owners to understand and purchase.