Running a business is much more than what it meets the eyes. One of the common (unfortunate) surprises the founders and CEOs eventually run into is lawsuits.
A customer or client sued them. Now they have to bear the cost of pursuing a legal course in defending against that lawsuit; this isn’t inexpensive. This could be fatal – especially if they run a small or a new business that doesn’t necessarily have the financial prowess to sustain legal expenses for long.
This is where buying business insurance policies come into play a big role.
The right business insurance can help protect your company, yourself, your employees and other relevant stakeholders – as is covered in the plan – against legal liabilities.
So, as soon as you have launched a business, you should ideally shop for fitting business insurance policies.
But here’s a roadblock: The world of insurance is big and complicated. There are many types of business insurance; an agent at insurance companies would always recommend you each of them to maximize their profit. If you’re not educated on the subject, you will inevitably find yourself lost.
To help you with that, follow this 3-point guide to buy your first business insurance policy:
1 Establish your risks – If your business doesn’t have a digital footprint or doesn’t collect users’ data, you won’t require data breach insurance. If you don’t sell tangible products, you won’t require product liability insurance. So, it’s important to first establish your risks, which will then aid you to determine the kind of business insurance policies you should buy.
Indeed, figuring out all the risks you and your company are exposed to is easier said than done; there are so many. You can’t anticipate who will sue you and for what reason. But in the initial stage, where you’re financially limited and you want to make less investment in insurance policies, you will have to make a broad generalization.
Find out the biggest reason why your consumer can make legal claims. (Looking at your competitors can give you a fair idea about this; the kind of lawsuits they are dealing with.) Accordingly, find business insurance that provides adequate coverage against that claim or risk.
2. Educate yourself about business insurance – There are many terms and caveats to business insurance policies; they have many nuances. In addition to basic factors like the extent of coverage, cost, obligations, and deductibles, there are plenty of other things that should be considered.
For example, if you defer payment, what kind of rate would you have to deal with then? If you decide to switch your insurance procedure, how can you do that?
There are many things to consider. And you can only consider them when you’re adequately educated about business insurance policies.
This requires a bit of work on your end, but the efforts are worth it. Take out some time to consume relevant resources on company insurance; read articles, watch videos, go through forum threads. Acquire at least the basic understanding of the what’s, how’s and why’s.
3. Talk to a licensed insurance broker – Self-learning and DIY’ing will only take you so far. As mentioned earlier, the world of insurance is big and complicated. Agents of insurance companies would try to sell you everything possible and maximize their returns. You need someone honest by your side who can assist you in the right direction; someone who represents you in front of the insurers; someone who can match your needs with fitting policies.
This is why almost every business owner chooses to work along with insurance brokers. You should too.
Find a licensed insurance broker – ‘licensed’ being a keyword here – and tap on their expertise. Talk to them, ask questions, and discuss your needs.
They will help you identify the real risks your business faces and then customize a policy accordingly. And since you’ve educated on the subject yourself, you can keep up with them, even providing your valuable inputs in picking the right insurance policy that perfectly fits your needs and requirements.
To that, since it’s usually recommended to review your business insurance needs annually, these experts can assist you even with that. Thereon, they can make adjustments to your policy accordingly.
There’s Much More To This…
There’s much more to buying business insurance policies. However, if you have a fair understanding of the basics and you have good insurance brokers to represent your well-being in front of the insurers – things certainly become a bit simpler.
The above-mentioned are three broad and fundamental tips to help you buy your first company insurance.
After buying the first one, as your business grows, you should invest in more policies. You can bundle them together to get cost-effective deals. In any case, remember that this is not optional. It’s imperative to protect your business that you’re working so hard to grow against legal claims. Business insurance policies can be that protection for your business.
PlanCover is a trusted insurance marketplace, built by HII Insurance Broking Services Pvt. Ltd. (HIBS). HIBS is a leading IRDA-insured insurance broker, boasting over 10 years of experience where it has managed 50,000 claims. Our team actively works with individual business owners in determining their insurance needs and finding them a fitting policy from top insurers. If you have any question or if you need help with anything related to business insurance, PlanCover is a name you can trust. Contact us today and let’s talk.