When you have business insurance, it’s important to ensure you’re not exposed to any surprise risks or losses. By conducting periodic reviews, you may discover unprotected areas that emerged after changes your company had over the past few months or so. Also, you’ll want to make sure you’re not paying for unnecessary coverages. Here are some practical tips for managing your small business insurance coverage and risks.
Bundle Business Insurance Policies
You can save on insurance costs if you bundle key coverages. For example, instead of purchasing general liability and property coverages separately, consider getting a single package that includes these. Getting all your coverages from one insurer might reduce your total premium costs. Also, managing bundled policies takes less time.
Review Your Deductibles
When a covered event occurs, such as the theft of business equipment, you’ll pay a certain amount out of pocket before your policy kicks in. This amount is your deductible, and the higher it is, the lower the cost of your premium could be. However, avoid selecting a deductible that your company cannot afford to pay.
Review Coverages Once a Year
An annual business insurance review is important because changes that may occur in your company in 12 months may affect your coverage requirements. After laying off a significant number of employees, changing your business location, or buying new mission-critical equipment, you may need to re-evaluate your coverage. Your insurance agent can help you conduct a comprehensive review and close any coverage gaps or eliminate insurance costs that are no longer necessary.
Commercial insurance coverages that may be affected by business changes include:
- General liability policy that pays for injury or property damage lawsuits/settlements against your company
- Business property coverage that covers repair/replacement of business assets like buildings, furniture, and office equipment
- Commercial auto insurance for your company’s fleet
- Business interruption insurance to cover lost income and additional expenses if a covered peril forces you to halt operations temporarily
- Equipment breakdown coverage pays for the repair or replacement of equipment damaged in a covered event
- Employment practices liability insurance for lawsuits that your employees file against your company
- Professional liability insurance to cover clients’ lawsuits/claims against your company, such as negligence or substandard work
- Cyber insurance can cover data breaches and associated costs like reputation management, credit monitoring, regulatory fines, etc
Fortify Your Everyday Risk Management Efforts
Losses due to major events like fire, business property damage, or liability lawsuits can hurt any small business’ finances. As such, it’s important to be adequately covered with insurance for hazards that may occur and cause devastating financial damage. If you got sued or fined for a data breach, the cost of the fine, court judgment, and your legal defense would be too high to pay out of pocket. In this scenario, having cyber liability insurance in place would protect your business from financial loss.
Consider these other tips to minimize your business risks:
Have a disaster recovery plan:
It helps anticipate and plan for any potentially destructive events that may occur. Consider your business location, type, size, and other factors in your risk assessment. Your plan should specify practical measures to mitigate or avoid potential losses.
Have a business success plan:
Having a plan in place can help keep your business stable when you choose to retire and hand over management to another person.
Keeping these factors in mind can help you manage your business insurance costs better. If you need professional assistance in reviewing your commercial coverage, contact our team at McCarty Insurance today. We are happy to help address your unique needs.