Insurance Can Save Your Small Business

It’s a new year and that means small business owners need to think about renewing their commercial insurance. It’s may not be the sexiest thing on the “to do” list, but having the right coverage is often the difference between surviving a calamity and shuttering your doors.

Natural disasters, such as floods, fires and hurricanes are one thing to consider. On average, 25% of companies never re-open after a major disaster. Accidents, thefts and lawsuits also can damage a business. In the past 20 years, employee lawsuits have risen 400%, with the most common lawsuits occurring against businesses with 15 to 100 employees.

Looking ahead, and considering what coverage you need can be a daunting task. Here are just a few things you need to consider:

More money means more insurance

Insurance isn’t only meant to cover your physical assets. If revenue numbers have changed significantly, the level at which your business is covered may need to be revisited. The amount of money your company makes can alter your coverage.

Expanding (or detracting) the property lines

Opening or closing locations during the course of the year also requires updating your policy. Property insurance premiums depend in part on the type and size of facility you occupy, so be sure the information is accurate. Maintaining an accurate policy can also reduce confusion and minimize payment delays if you need to file a claim.

Changes of operation and inventory

Variations in the amount of inventory or equipment your business stocks may mean that you need to carry more insurance to fully protect your assets, or that you can reduce your coverage and save money. If you have considerably more or less inventory than last year, update your property insurance accordingly.

Know the Regulations

Government regulations can have a significant effect on insurance coverage, but insurance carriers may offer very different pricing to accommodate regulatory changes. Obtaining quotes from several carriers each year will help you to stay on top of all of these changes and to be sure you have the coverage your business needs at a competitive price.

Protecting your business is important. Some of the tools I use to help circumvent disaster are backup tools, and my three small business tools I can’t live without. What are your favorite tools?

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