Your business is more than a golden goose for generating profit. It’s a significant part of your legacy, built with hard work, grit, and sacrifices. That’s why the thought of your labors going down the drain can be tortuous.
However, even if you can’t imagine the idea of losing your business, it’s still a possibility. One natural disaster or damaging lawsuit is all it would take to tear down your efforts before your very eyes.
These risks are what make business insurance a worthwhile investment. Insurance cover can protect your business from any risks that threaten it. However, choosing the right insurance policy isn’t a straightforward task, especially with all the complex jargon that you have to understand.
Fortunately, we’re here to simplify things for you. In this guide, we offer four crucial factors to evaluate so you can choose an insurance cover that keeps your firm fully secure from potential threats:
1. Understand the Risks in Your Industry
While some threats are faced by all businesses (such as economic challenges and increased competition), others are specific to an industry.
For instance, healthcare organizations are more likely to have treatment errors that can harm patients. There can also be instances where a patient suffers an injury if they slip within the hospital’s premises due to spilled fluids on the floor.
In contrast, manufacturing firms face risks like explosions due to faulty equipment. Workplace accidents that lead to employee injuries are common among these businesses, as well.
The unique risk each business faces determines the insurance cover they opt for. Hospitals, for example, can opt for general liability insurance in case of patient wounds from a slip. Liability insurance by Next Insurance – to cite just one example – can handle the medical bills and settlement claims for patient injuries within the workplace.
For a manufacturing firm, commercial property insurance is an ideal choice. In case of an explosion that destroys the factory, this policy can cover the cost of repairs and replacing equipment.
2. Learn the Types of Business Insurance
When you understand the threats against your company, you can choose the right type of business insurance that offers protection against those risks. Here’s a snapshot of some common types of business insurance and what they cover:
● General Liability Insurance
This is the most popular form of business insurance. It offers financial cover against lawsuits, medical bills, and settlement claims if your business is responsible for a customer’s bodily injuries or property damage. It can also cover the costs for copyright infringement, defamation, or marketing-related lawsuits.
● Commercial Property Insurance
If your warehouse or factory is destroyed by a natural disaster, commercial property insurance is the safety net you need to handle repair costs. It can sort out the bills to rebuild the factory and replace equipment.
● Cyber Liability Insurance
Data breaches have become a daily threat for businesses. In recent years, cyber attacks have affected well-known companies like X (formerly Twitter), Microsoft, and LinkedIn.
Companies can face lawsuits with hefty settlement claims from customers who have had their data stolen during a breach. To cover these costs, alongside attorney fees, a cyber liability insurance policy comes in handy.
3. Consider the Deductible
When you make an insurance claim, your deductible is the amount you’ll pay from your pocket before your insurance provider covers the rest.
Usually, higher deductibles equal lower premiums and vice versa. You might be tempted to pick an insurance package with a high deductible to save money on your monthly or annual premiums.
However, when disaster strikes, is the deductible within the budget your company can afford? You must ensure your deductible isn’t beyond your company’s financial strength, so you’re not left in a complex situation when you eventually make a claim to your policy provider. Compare the amount side-by-side with the premium to determine what’s ideal for you.
4. Compare Multiple Insurance Providers
You need to vary your options to determine what works best for your business when it comes to choosing the right insurance policy. Get quotes from different insurance companies and compare what each policy covers alongside the premiums and deductibles.
Look at the numbers side-by-side with your budget to determine the choice that makes the most financial sense. You should also consider each company’s reputation. We would recommend working with an insurance advisor to review and pick the best policy.
Conclusion
While insurance is critical for your business, it’s not something to invest in hastily. Remember that it’s still a financial decision. As such, you don’t want to waste money on the wrong policy. Before choosing your insurance plan, consider your risks, the policy that offers protection against these threats, and the deductible you can afford. You should also consider seeking counsel from an investment advisor.