Every business requires risk management to stay profitable. Whether you operate a traditional brick-and-mortar business or a digital-first enterprise, protecting your assets and covering potential liabilities are essential. Fortunately, implementing the right type of insurance policy is simple for any business owner who understands the ins and outs of obtaining coverage. From choosing which type of policy is right for you, to understanding each component of your policy and its associated costs, it’s simple to get started as an entrepreneur with a small business.
What is the best type of business insurance?
This is a common question for new business owners, and it’s an especially important inquiry to ask yourself as you move forward with your business. Your business insurance policy will cover a number of different scenarios that could pose threats to your success.
If a customer experiences damage to their property, becomes sick or gets into a car accident after visiting your business premises, you want to be prepared with coverage to cover those liabilities. Your business insurance policy can cover incidents like these and more. However, it’s important to choose the right type of policy for your business.
The best business insurance will protect your assets, provide coverage for your liabilities, and have a reasonable cost to maintain. Choosing the right policy, combined with proper insurance representation, can help protect your business and provide peace of mind.
What are the different types of business insurance?
Business insurance can be categorized into three types – property insurance, liability insurance, and workers’ compensation insurance. Although these categories are generally broad, there are many nuances and distinctions within each sub-category.
Understanding the differences between these types of business insurance, along with how they apply to your specific needs, can help you decide on the best protection for your assets and liabilities.
How to find competitive quotes for business insurance
Finding the right coverage for your business can be challenging, which is why it’s important to start your search early. Even before you’re ready to open your doors to the public, you should begin searching for insurance companies that offer coverage for business owners. You can begin your search by looking online at sites like InsNetInsurance.com, and/or by reaching out to local insurance agents. In addition to searching by state, you can also search by a service provider to find multiple companies that offer the type of coverage you require. Another way to find the right business insurance is by consulting with your accountant. An accountant can help you understand how different types of business insurance work, and can also help you find the most suitable providers for your needs.
Things to consider when choosing a policy type
When choosing the best type of business insurance for your company, you’ll need to consider a few key factors. Most importantly, you’ll want to consider your company’s specific needs, as well as the type of coverage that best meets those needs.
These factors can help you determine the best type of business insurance for your company:
- The value of your company
- The risk to your company
- The scope of your company
- Your budget
- Your business risk tolerance
- Your business needs
Which provider provides the best fit Let’s take a closer look at these factors and how they might influence your choice of the business insurance policy type.
The value of your company
This can influence your choice between property insurance, workers’ compensation, and liability insurance. If you have a high-value asset like a business franchise, you’re likely to benefit more from something like property insurance than a personal liability policy. On the other hand, a business owner with a less valuable asset may want to consider workers’ compensation insurance.
The risk to your company
This factor can help you decide between two types of business insurance – commercial insurance and business insurance. Commercial insurance allows you to cover a variety of risks, including business interruption losses and claims for theft, while business insurance protects your personal assets (such as your business’s cash, other inventory, and other personal property).
The scope of your company
This factor can help you distinguish between business insurance policies with different scopes. A policy that covers a broad range of assets and liabilities may be more cost-effective than a policy that covers a narrow range of risks.
Your budget
Depending on your budget, you may choose to purchase insurance coverage through an agent, or you may choose to purchase coverage directly from an insurance provider. Agents represent a middleman, which can result in higher costs.
Your business risk tolerance
Business risk tolerance, which can be described as your level of risk-taking behavior, can influence your choice of policy. A more conservative business owner may choose a policy that offers less coverage for a higher premium, while a more aggressive business owner may choose a policy that offers greater coverage for a lower cost per incident.
Your business needs
This factor can help you identify the type of coverage that best suits your needs. It may also help you determine the best provider for your specific coverage needs.
Summary
Whether you own a brick-and-mortar business or operate a digital-first enterprise, protecting your assets and covering potential liabilities are essential. Unfortunately, implementing the right type of insurance policy is often challenging. However, choosing the best type of business insurance doesn’t have to be complicated. You can get started by picking the right type of business insurance and consulting with your accountant, as well as your insurance representative.
