Many of us dream of starting our own business so we can finally leave our 9 to 5 jobs behind and be our own bosses. It’s a rewarding pursuit. If you succeed, the earning potential is significantly higher, and you gain more independence and flexibility.
However, any business, regardless of its industry, faces risks. That’s where insurance comes in. Most new business owners only get the minimum insurance that’s required by law. But that’s the wrong approach. What you should do instead is evaluate your risks and get the type and amount of insurance that best fits your needs.
You Get What You Pay For
Insurance may appear to those who are just starting a business as yet another expense, but it should be viewed as a long-term investment.
Any business has risks, and having insurance protects you from substantial financial losses. It may be tempting to get the bare minimum, but the key is to strike a balance between cost and coverage. Insurance comparison guides like Insuranks can help you get the coverage you need for the best price, whether you sell baking goods from home, design websites, or run a business specialized in home remodeling.
Understand Your Risks
You can’t get the right insurance without knowing your risks. Start by considering the type of business you run and the most common risks associated with it. Then think about the vehicles and other equipment you use in your business and how much it would cost you to repair and replace them if they were damaged or stolen.
If you have to stock expensive inventory or store sensitive information on your customers, those are more risks you are exposed to.
We live in a very litigious society, and if your business is relatively small, even one lawsuit can destabilize you, so it’s important to do your research and talk to other business owners in your sector. This way, you can make an informed decision and pick the best policy for your business.
Review Your Coverage Annually
As your company changes, so do your risks. That’s why it’s important to review your coverage annually. It can even result in savings because this way, you won’t keep paying for equipment or vehicles you no longer use or employees that no longer work for you.
But most importantly, you make sure you have the coverage you need, so you don’t expose yourself to unnecessary risk. Don’t assume that your insurance provider will do this for you automatically. It’s up to you to inform them of changes in your company that require insurance adjustments.
You’ll also want to do a bit of comparison shopping every year to make sure that your provider is still giving you the best offer. Reviewing your coverage needs and looking through offers from other providers will put you in a better position to negotiate your premiums.
Note that you can also get a better deal by bundling your coverages. The more insurance policies you get from the same insurance provider, the more open they’ll be to negotiating and offering you a discount.
Photo by Tyler Franta