Whether you’re just starting your company or you’ve been in business for some time, striking a good balance between coverage and cost when it comes to business insurance is essential. This is also a source of great frustration for many business owners, as it’s often quite difficult to determine what types of coverage you need and how to get the best rates.
Some combination of business insurance policies is a necessity for every business, but with so many options out there, it’s common to have questions about what’s necessary and what each type of policy does. Some of the most common questions about business insurance follow.
WHAT TYPE OF BUSINESS INSURANCE DO I NEED?
While this answer will necessarily be different for every business, there are some common themes. A Business Owner’s Policy, or BOP, is often a good place to start. These typically include property insurance, business interruption insurance, and general liability insurance, although there is usually some flexibility depending on the nature of your business and your needs.
Purchasing these coverages as a bundle in a BOP will often be cheaper than acquiring each policy separately, and since you need them all anyway, it makes sense to go this route. However, there are some common and necessary coverages that are not included in a BOP, including workers’ compensation insurance, professional liability insurance, commercial auto insurance, and health and disability insurance.
While it’s possible your business will not need these additional coverages, it’s important to understand what each does so you can determine if they’re appropriate for you. For example, just about every company with workers, often including contractors, will need workers’ compensation insurance, although depending on the nature of your business, commercial auto insurance may not be necessary.
HOW IS A PROFESSIONAL LIABILITY INSURANCE DIFFERENT FROM A GENERAL LIABILITY POLICY?
A general liability policy covers you if actions by you or your workers cause damage or injury to a third party for which you are financially liable. It does not cover the cost of replacing the poor work itself, and it doesn’t protect you from lawsuits over professional mistakes or negligence that caused harm or hardship to your customers. In the case of the latter, professional liability coverage is what you will rely on to cover legal costs as well as any settlements resulting from a lawsuit.
HOW CAN I LOWER MY WORKERS’ COMPENSATION PREMIUMS?
The cost of workers’ compensation insurance is a source of frustration for many businesses, but fortunately, there are quite a few steps you can take to reduce your premiums and keep costs under control. These include:
- Following sound hiring practices
- Putting a comprehensive safety program in place
- Promptly and fully investigating all workplace accidents
- Training all employees on workplace safety and workers’ compensation procedures
- Implementing a structured return to work program
- Designating an employee at your company to periodically review claims and ensure proper handling
- Coordinating with your insurance agent to ensure an unencumbered flow of communication regarding claims
- Periodically reviewing your policy to ensure it’s appropriate and that all appropriate credits have been applied
Taking these steps will help you reduce your workers’ compensation premiums directly, and it will also minimize losses caused by employees missing time, as well as the cost of training replacements.
WHAT IS BUSINESS INCOME INSURANCE?
Business income insurance is also sometimes referred to as business interruption insurance, and it serves to replace income lost because of interruption in the functioning of your business due to a disastrous event, provided it’s the type of event that’s covered. These events include things like fires and natural disasters, and the carrier will pay for your actual losses, as well as any extra expenses not directly related to repairs but that you would not have incurred were it not for the disaster.
With so many types of business insurance available, you may frequently have questions and concerns about your existing policies and those you’re thinking of purchasing. To learn more about how we can help you keep your business fully protected without undue cost, contact our offices today.