What to Look for in a Business Insurance Plan
Shopping for business insurance can be overwhelming between the different types, prices, coverage amounts, and providers there are a lot of decisions to make. Business insurance plans are designed to protect your company, employees, property and any other assets your company may have. These plans are not one-size-fits-all, because no two businesses are alike.
The Different types of Business Insurance
It is important to be aware of and understand the different types of business insurance in order to know what you are looking for in terms of coverage. The types and amount of coverage that a business needs depends on the size of the company, the industry, and what assets the company has.
- General Liability Insurance: Protects your business from claims of bodily injury, personal injury (such as slander), copyright infringement and property damage.
- Commercial Property Insurance: Protects your business’s physical location, items inside including computers, office supplies, records, tools, machinery and outdoor property such as signs and fencing, and the property of others. Commercial property insurance protects your business from disasters such as hurricanes, fires, and hail. Additionally, commercial property insurance covers vandalism and theft. Incidents that are covered vary by plan, so it is important to consider the weather, geography, and location when choosing coverage.
- Professional Liability Insurance: If an employee is sued for a mistake they committed while providing a service, professional liability insurance helps cover the cost of a lawsuit.
- Commercial Auto Insurance: This one is self-explanatory; commercial auto insurance insures company vehicles.
- Cyber Liability Insurance: Helps cover the cost of recovery following a data breach or other cyber-attack, including if a customer files a claim against the company for stolen information.
- Worker’s Compensation Insurance: Pays for employees’ work-related injuries and illnesses, covering medical bills, lost wages, and disability benefits. This type of insurance is required by law in most states.
- Commercial Umbrella Insurance: Umbrella insurance gives you additional coverage if a claim exceeds your coverage limit for any type of insurance in your plan.
What Insurance is Required for your Business?
Some types of insurance are a matter of choice while others are required by law or in contracts by clients, landlords, and mortgage lenders. It is important to make yourself aware of these requirements and know that ignoring or refusing to abide by them could result in eviction, loss of business, or government fines.
Worker’s Compensation Insurance is required in most states, including Tennessee. Failing to obtain worker’s compensation insurance or failing to properly pay state mandated temporary disability payments comes with expensive penalties.
For certain industries, it is important to consider that your clients may require your company to have certain insurance coverage. It is common for client contracts to include a required level of coverage in order to protect themselves from financial loss if something bad happens. For example, a potential client of an IT company might require that they have a certain amount of cyber security coverage in order to do business with them. An umbrella policy is a good option to supplement your insurance plan to ensure that you meet client coverage requirements.
Landlord and Mortgage Lender Requirements
Landlords and Mortgage lenders often have insurance requirements to protect themselves from property damage costs and to cover potential lawsuits over claims of bodily injury. A general liability policy will provide your business with the necessary coverage whether you are a property owner with a mortgage or you are leasing your business’s space.
Match Your Risks with Your Coverage (Coverage for Risky Business)
Similar to how the cost of a life insurance policy is determined by factors such as age, smoking, weight and gender that affect your risk of death–business insurance policies fluctuate based on factors that make a business more or less likely to be sued. If your industry is high-risk and you opt for an insurance plan with minimal coverage in order to save money, you are taking a serious gamble. If you don’t have adequate coverage, a major lawsuit could destroy your entire business and be far more costly than a higher insurance premium. Different industries have higher risks in specific categories and their insurance coverage should reflect that. For example, a trucking company should have extensive commercial automobile insurance coverage because the likelihood of car accidents is high.
Providing Employee Benefits
Businesses are not required to provide their employees with insurance benefits such as health insurance, however, it is important to consider how offering benefits or not will impact your company. Depending on your industry, benefits may be expected as an industry standard.
If other companies in your industry are offering benefits and you are not, it could be an obstacle to finding new employees. According to a study conducted by America’s Health Insurance Plans 46% of adults reported that health insurance was a positive influence or deciding factor in choosing their current job.
Employee benefits also improve employee retention, which is important because high employee turnaround rates can be detrimental to your company’s productivity and reputation. According to the same study mentioned above, 56% of adults with employment health benefits report that their health coverage was a critical factor in deciding to stay at their job.
Find the Best Coverage for the Best Price
Paying for an expensive insurance plan that you don’t really need is an unnecessary financial burden to your company. On the other hand, under-insuring your company in order to save money is risking a financial disaster if a major problem arises. After you determine the coverage that your company needs and the budget that you are willing to allocate to insurance it is time to start shopping. Requesting quotes and comparing rates and coverage plans from multiple insurance providers will help you narrow down your choices. An ideal business insurance plan has the appropriate level of coverage at the best possible price.
Consult an Insurance Service
With all the insurance types available, and the multitude of insurance providers, it can be difficult for businesses to be sure that they have adequate coverage and feel confident that they are paying a reasonable price. Inter-Agency Insurance services takes away these uncertainties by creating a coverage plan that is tailored to your specific business and negotiating with insurance carriers to secure you the best deal available.
Risk is inevitable when it comes to running a business, but professional insurance guidance can give you a peace of mind. Contact Inter-Agency Insurance Services by calling (865)637-4519, visit inter-agencyinsurance.com or request your personalized quote for free today!