We all know about personal insurance covers (life insurance, health insurance, and more), but if you own a business then you need to know about commercial insurance. Most businesses are subject to risks, and one can incur a loss at any given time. So, having a business or commercial insurance is the smart thing to do if you have a small and medium enterprise (SME) and want to safeguard yourself against unnecessary financial burdens.
There are different types of insurance you can avail based on the requirements of your business, such as commercial general liability insurance, marine insurance, and more. But before you purchase a policy, let us understand few things you must take into consideration –
- Do a thorough risk analysis: The first step is to identify and analyse what kind of risks are involved in your business, to get a rough idea of all the things you’d want coverage for. Different businesses require different coverage. There is no one cover for all the businesses in the world. Hence, you need to carefully evaluate the risk that your business faces and accordingly look for insurance coverage. Assuming that you’ve purchased a marine insurance cover, your insurance company will also do a complete risk analysis, and help you decide whether you will receive partial or total coverage when it is time for a claim settlement. Whichever deductible you choose will have an impact on your premiums; lower deductible will lead to higher premiums.
- Remember to cover valuables: Your business might need certain equipment and tools, furniture, etc. which are usually covered under damage to property in general liability insurance. Having said that, not all items are covered under this. Thus, you need to have your valuables covered. For instance, if you have a business that possesses certain valuable items like antiques and precious artwork, then you need to get them insured separately.
- Fulfil insurance mandates: If you own a business organisation, then you might be obligated to have certain insurance plans based on employee strength, agreements, and location of the business, as per law. Ensure that you fulfil these insurance obligations so that you don’t get any penalty.
- Choose self-cover: Many business owners opt for self-coverage as well, especially if they are the single owner. Sometimes as a business owner you might forget this step, but you must remember that you cannot make the organisation work without yourself and you have an integral role to play. So, get yourself insured since you are an asset to the company. Opt for personal insurance cover and health/medical insurance for yourself too.
- Make the right insurance estimate: Sometimes you might have the wrong estimate and under-insure your company, which can be troublesome when you face losses. Plan ahead, estimate the true value of your assets, and make sure you are sufficiently insured.
So, these are the important aspects you must keep in mind if you own a business and want to purchase business or commercial insurance. Remember to look at these factors to make an informed choice.