As a business owner your insurance in this economy can be the difference between a making a profit or sustaining a loss. By focusing some of your energy towards looking over your policy you may be able to save a considerable amount of money.
The United States Small Business Administration [SBA] has ever-changing standards and requirements. Luckily, the Hartford Small Business Insurance Center keeps close track. It’s a great place to start, even if you don’t opt to sign up with them. Their site provides all the information and tools you need to protect your small business.
If you are a newbie to this field try to get some idea on this topic before proceeding. Assume that you live in Philadelphia, so this business insurance buying tips will be helpful for saving your valuable time and money.
Top small-biz tips:
1. Errors & Omissions Insurance – Regardless of what kind of business you own, customers can claim that something you did on their behalf was done incorrectly, and that this error cost them money or caused them harm in some way. Formalizing a contract with your clients can help limit your liability, but the big expense in an E&O claim is the legal defense needed to prove innocence. E&O policies are designed to cover these defense costs.
2. “Hold Harmless” Agreements – Of course, there are some things you can’t prevent, like storms, power failures, or accidents. But there are ways of minimizing either the likelihood something will occur, or the impact it will have on your business after it does. A “Hold Harmless” agreement is a risk management tool that shifts legal and financial risk from you to another party.
3. Specialized Commercial Insurance – Does your business face unique risks? For example, do you manufacture food products that may be vulnerable to contamination and product recall? Or do you often carry tools to your customer’s work site, and need to make sure your property is protected off-site as well as on-site? Oftentimes specific coverage can go a lot further than a general, pre-packaged deal. Whatever your industry, chances are there is commercial insurance coverage tailored to your specific risk factors.
We are currently in a “soft” market and with the slowing of the economy insurance companies will likely decrease their rates in order to gain market shares.
Here are a few ideas which can help lower your premium:
1) Gather all your policies, approximately three months before your renewal date, and start comparing various insurance brokers. Even though there is nothing wrong with having loyalty to your broker, you should shop your policy every year with at least two agents.
2) You can see great savings combining all your insurance needs by using one commercial insurance company and getting the advantage of a multi-policy discount (after comparing different companies).
3) When choosing your independent insurance agent ask if they represent more than one commercial insurance company. They should represent a variety of carriers which will give you a choice of quotes from which to choose.
4) Meet with your agent and explain exactly what your company does as every situation is different (don’t just give them declaration pages of your current policy and ask for a quote). There is no reason to pay for insurance that you don’t need and there is really no excuse for not paying for insurance that you do need.
5) Make sure that your broker submits your application for coverage at least 45 to 60 days before renewal. This is done for a few reasons. One, it gives you more time to answer any questions that may arise from the application. Two, it’ll give you ample time for any inspections that may need to be done.
By following the above points you will be on your way to saving on your next policy.