Tips When Taking Business Insurance for Small Businesses

Most small business owners have a hard time deciding which insurance policy is best for their business. They are often in a dilemma as they have little operating capital yet are exposed to a variety of risks. The first step to obtaining business insurance is visiting an insurance broker. Below are some of the things that you will discuss with the insurance broker to determine which policy suits your business. 

What risks are you exposed to? 

Before deciding on a cover, the insurance broker will help you determine what risks your business is exposed to. For instance, business assets may be exposed to theft and natural hazards such as fires and floods. You might also need to insure your employees against workplace accidents. If you work on your clients' premises, you may need a cover to protect you from financial losses if you damage their property. You will also have to evaluate your risk tolerance when deciding which cover to take as it may be impossible to protect yourself from all perils.

What are your options? 

Some of the business insurance covers include the following:

• Product liability insurance covers any claims resulting from product defects and design flaws.
• Property insurance protects the business premises from vandalism and natural hazards.
• Business interruption insurance ensures that you receive some money if you are unable to conduct business due to natural or human causes.
• Workers compensation insurance covers your employees if they get injured while working.
• Public liability insurance protects you from any claims of injury or property damage arising from members of the public or your clients.  

Are there any applicable laws? 

Some insurance covers are mandatory. For instance, in Australia, it is illegal to drive a vehicle without an insurance certificate. While workers compensation insurance is compulsory, public liability insurance is an industry practice, and most business owners have the cover. Further, some clients require you to have the policy before they can hire you. 

What are the costs? 

Costs are an important consideration before taking up the insurance cover as most insurance companies will only compensate you if you pay your premiums. An independent insurance broker will give you quotes from different insurance companies. Ask your broker to explain the terms of each insurer and take the cover from the company that offers you the best value for your money. 

When considering which insurance policy suits your small enterprise, determine which risks you are exposed to, the various kinds of insurance covers, applicable laws and the costs. Experienced insurance brokers will help you identify the best cover for your business.