What to Look For When Buying Insurance for Your Small Business
By USInsurance.com Staff
One of the most important things you can do for your small business is to have the best insurance you can afford. This is not an easy task. Insurance policies, especially those for businesses, are extremely hard to read and understand. They can be 10 or more pages long and have many terms and conditions that you don’t understand. It will pay in the long run to take your time with this important step in assuring that you and your business are well protected should anything happen. Here are some common things that people tend to overlook but are very important when obtaining an insurance policy.
Buy enough insurance.
In the event of some type of catastrophe, you may need a lot more insurance than you think you do. You should consider buying an ‘excess liability’ clause to cover you in case the worst happens. This clause kicks in when and if the liability insurance has been exhausted.
Buy ‘business interruption’ insurance.
If there were a fire that destroyed your business, or you sustained water damage, for instance, you might have insurance to rebuild, but how do you support yourself and your employees while the rebuilding is taking place? Business interruption insurance pays you while the business is being repaired and it is often overlooked.
Buy the ‘occurrence’ liability insurance.
This type of liability insurance will cover you for the actual time the accident occurred, even if you no longer have the business. Otherwise, the normal liability insurance policy only covers you if you had the insurance when the accident occurred. You might also consider buying a rider to the liability policy called a ‘tail policy’ that will cover you even years after your business closes its doors. You never know when someone will file a claim against you.
Key person insurance.
If there is one person involved in the business that is vital to that business, then getting what is called key person insurance is vital as well. If that one person who is irreplaceable to the business dies, then this insurance will pay the money needed to buy that person’s share of the business from his or her survivors.
When it comes down to actually buying a policy, the cheapest is usually not the best. Insurance is a pain to have to pay for, but it is essential if there are ever any problems. Shop around and talk extensively with an agent. Know what you need before you begin your search for insurance, so you don’t end up with more or less than you need.
Make sure you read the insurance policy completely. Not only read it, understand it. Sit with an insurance agent and go through everything. Ask questions about anything that is important or anything you don’t understand. Take notes, and then file those notes. If there is ever any dispute, you can then go back and see exactly what was said about the policy. Your business is your livelihood and you need to protect it in the best possible way.
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