buying business insurance

7 Tips for Buying Business Insurance for Startups

Each year, more an average of 627,000 new businesses open their doors. No matter what industry they’re in, they all need comprehensive business insurance in place.

Buying business insurance can feel complicated, especially for new business owners. Luckily, it’s easier than you think! You just need to focus on your business’s needs, your budget, and your overall concerns.

If that sounds overwhelming, don’t panic. Here are a few simple tips to help you find the best coverage for your new business.

1. Figure Out Your Business’s Risks

Every business has unique risks based on its location, the industry, and its size. This means you can’t just buy a general business insurance policy and deem it “good enough.”

You need to sit down and think about the risks your business faces each day.

For example, if you provide services to clients off-site, you’ll want additional liability coverage to protect your team while they’re working. If you use a car for business purposes, you must invest in commercial auto insurance to protect yourself on the road.

Once you have a list of risks, look for insurance policies that protect against those risks. You can always ask an insurance agent for advice on the best policies for your needs.

2. Shop Around with Multiple Providers

When you’re first starting out, it’s tempting to buy the first insurance policy that fits your needs and your budget. Doing so isn’t always in your best interest.

You need to shop around with multiple providers to find the best options for your business.

Insurance providers offer different types and amounts of coverage at different prices. This means you could end up paying more for less coverage if you go with the first provider you find.

When in doubt, shop around.

Get quotes from different providers and don’t be afraid to ask questions when you speak to their representatives. Remember, you need to make an informed decision and if the provider isn’t willing to answer your questions thoroughly, they will not be helpful if you need to file a claim.

While shopping around, don’t be afraid to ask about discounts on coverage. Some providers offer discounts if you’re buying multiple types of insurance through their agency. They won’t advertise this — you must ask when getting quotes.

3. Go Through Each Policy in Detail

Once you have a few quotes on-hand, take the time to go over each policy. Look at the types of coverage and coverage amounts each policy provides. If there’s anything that’s unclear, call the provider and ask for clarification.

You need to know what each policy covers and what they don’t. If there are gaps, you can then keep shopping for more comprehensive coverage or can invest in supplemental policies to keep your company safe.

4. Buy More Coverage Than You Think You Need

When shopping for insurance, it’s easy to think the minimum amount of coverage is more than enough. After all, your business could be up and running for years before you have to file a claim.

However, you never know when you’ll need to use that coverage.

Depending on the type of incident you’re dealing with, that small amount of coverage may not be enough. This means you’ll have to pay the rest out-of-pocket, putting a strain on your business’s operating budget.

If you can, buy more coverage than you think you’ll need. This way, you’ll have coverage, no matter how big or small the claim is.

5. Always Pay Attention to the Deductible

No matter what type of insurance you buy, you’ll always have to pay some amount out-of-pocket if you file a claim. This amount is your insurance deductible and it will vary from provider to provider.

Typically, the smaller your deductible is, the higher your monthly principal payment will be. You can lower your monthly insurance payments by increasing the deductible. This can help you get higher quality coverage without increasing your monthly spending.

Just be careful. The last thing you want to do is make the deductible so high that you can’t afford to pay it when you need to file a claim.

Think about your overall budget and choose a deductible that’s reasonable for your financial situation.

6. Don’t Choose Coverage on Price Alone

When it comes to business insurance, you often get what you pay for. This means choosing the cheapest coverage may not be the best decision for your business.

Look at the price as a single factor when reviewing quotes and coverage options. Use it to guide your decision, but don’t base that decision solely on price alone.

Consider the total coverage amounts, the reputation of the insurance provider, and how comfortable you feel when you speak with the insurance agent. Remember, the agent is your main point of contact whether you’re filing a claim or reevaluating your coverage options.

You want to choose a provider that fits your needs and your budget, but they need to be one you’re confident in working with.

7. Reevaluate Your Coverage Needs Annually

Your business will change over time and so will your insurance needs. Unfortunately, the policy you buy when you first open for business may not be enough after a year or two.

The best thing you can do is to review your coverage needs every year.

Call your insurance agent and discuss your business’s growth and your changing concerns. If you have huge developments throughout the year, let your agent know as soon as they happen.

No business owner wants to file a claim only to discover that they’re under-insured.

Buying Business Insurance Doesn’t Have to Be Tough

As a business owner, you want to protect your new business completely. Buying business insurance is the best way to protect your finances and your company.

Take the time to think about the coverage you need, how much you’re willing to pay, and what you want the policy to do.

Once you’re ready, contact us and discuss your company’s unique insurance needs. Our dedicated agents will help you find the best policy for your business, whether you’re just starting up or have been in business for a few years.