3 Things Everyone Should Know About Business Insurance

Operating a business means facing many potential risks. Fortunately, there are companies that offer business insurance. However, you should go into the process of setting up a policy with a clear understanding of some basic elements of insuring a business. Here are three things everyone needs to know about setting up a policy.

Types of Business Insurance Policies

Commercial general liability insurance is one of the most basic forms of coverage. It protects a business against accidents involving members of the public. For example, a grocery store needs this sort of coverage in case someone slips on a wet floor.

Property insurance covers you in case an event damages your location or inventory. Each policy has to be highly specific. You'll need to talk with your insurance agent about coverage for fire, theft, vandalism, storms, floods, and other events.

If you enter into a lot of contract business, you may need coverage for errors and omissions. Professional liability coverage is also a good idea for licensed contractors, designers, engineers, and architects. Some businesses also acquire indemnification for their officers and directors. If you manufacture anything, you'll want product liability insurance, too.

Premiums and Deductibles

Arriving at an insurance price is always a balancing act. On the one hand, you'll want to pay the lowest premium possible each month. On the other hand, you don't want to be stuck with a deductible that's too high for you to handle.

Start by determining how high an amount you're comfortable paying if something happens. If you want to avoid potential long-term risks, it's best to account for the chance that two events occur close to each other. Use this figure to determine the deductible for your policy, and then your agent can use it to find the best premium for your business insurance.

Discounts

It's also a good idea to talk with your agent about specific actions you can take to further reduce your premiums. For example, many insurers offer discounts to businesses that install fire suppression and security alarm systems. You might also benefit from providing employee training on how to mitigate risks. If you deal with customer data, you may get a discount for properly implementing digital security methods.

You might be able to bundle policies, too. For example, a store probably needs property and general liability coverage. It makes sense to bundle coverage and ask for a small discount.

To learn more, contact a business insurance company.