So maybe you’re a seasoned business pro looking to switch your business protection, or maybe you’re covered in that new entrepreneur smell and this whole process gives you cold sweats. Either way, getting set up with the right business insurance doesn’t have to be painful. In fact, we’ve gone ahead and boiled the whole thing down to just seven and a half simple steps.
Go ahead, give it a quick read. And once you’re ready to make a move, our independent insurance agents will help you take it the rest of the way, answering any questions you have and making sure you’re paired up with the right insurance for your biz.
Simply put, business insurance is a contract between you and an insurance company. You pay them monthly, quarterly or yearly (these payments are called “premiums”) and in exchange, they’ll cover costs in certain kinds of emergencies (what they agree to cover is called “coverage”).
Business insurance can cover everything from damage from fires and natural disasters, to theft, to legal costs. And each package can be tailored to your business’s exact needs.
Most insurance companies will ask you to pay a certain amount of damages before their coverage kicks in. This amount is called a “deductible.” Generally speaking, lower deductibles are good and higher deductibles are bad, but a lower deductible does mean you’ll pay more in premiums.
We’ll get into the finer points later. But now, let’s talk shopping—step by step.
There are two main reasons to have business insurance: It covers your backside in an emergency, and it helps your business grow. That means whether you’re flipping houses, selling quilted holiday potholders, or taking your friends’ grad pics in your spare time, business insurance is for you.
That said, there are times when having business insurance is especially necessary. Here’s a breakdown of common signs that you need business insurance, STAT:
Business insurance is never just business insurance. It’s an umbrella term for many different kinds of insurance, just designed for commercial use instead of personal use. (This is why the topic is so mind-boggling and confusing to the uninitiated.)
Some types of business insurance are important to all businesses, while some are only necessary for a few. Here’s a breakdown of common kinds of business insurance and what you need to know about them:
You don’t need to parse this yourself. Business insurance (especially small business insurance) is often sold in packages designed for certain types of businesses, from wedding photographers to RV sales lots. Your agent can help you look for a package that you can tailor to your needs as you grow.
Now it’s time for the nitty gritty of how to get small business insurance. Business insurance is based on a giant math problem. Companies make an educated guess about how likely your business is to get into a scrape based on its niche, size, fire risk, location and a bunch of other things.
To do this math, companies need your info. Fill out an application online or in person (if you’re old-school like that) so they can figure out what insurance to offer you. Not sure what to put down? An insurance agent can help, and they will often offer to fill out the application for you.
Once you’ve decided what types of insurance you want, you’ll still likely have to choose among a few different insurance companies (or “carriers”). Qualities to compare between carriers include:
Before you make it official, double-check that you’re paying a fair price. Things that push costs higher include flammability, liability and size. If you run a large carpentry shop that exclusively makes baby furniture, you’ll likely pay a lot! On the other hand, simpler, smaller businesses will typically pay less.
Small business insurance costs start at a few hundred dollars per year for tiny businesses, and can go up into the thousands or tens of thousands for riskier, larger businesses. And mega-corp business insurance costs range into the millions.
Remember that your business insurance premiums are an investment in your business’s safety. It’s easy to begrudge that monthly or yearly cost until a lawsuit, hurricane or other disaster strikes. That’s when your insurance gets to step into the spotlight and strut its stuff.
Once you’ve picked a quote, finalizing your insurance is as simple as dotting the i’s and crossing the t’s on your signature. Congrats! You did the thing. Whether you simply changed insurance companies or bought insurance for the first time, we salute you.
Starry-eyed over your brand-new, super-awesome policy? Enjoy the honeymoon, but don’t forget to break it off with your old beau, too. Luckily, your new insurance agent can deal with it for you. You’ll usually be required to put the cancellation in writing for legal reasons. Once that’s done, you’re free.
Did you know that installing sprinklers, security cameras, and more can save you money on premiums? This kind of business insurance discount can be explicit or subtle, but the safer you make your business, the lower your costs can go. Your insurance company doesn’t want a disaster and neither do you, so your interests align.
Independent insurance agents are the super-duper, not-so-secret life hack for buying business insurance. They work for you, not the insurance companies, so they can find the right company with the right prices for you. They’ll also help you with the boring parts of the application process.
Their help doesn’t stop there, either. If disaster strikes and you need to make a claim, they’ll help you meet deadlines and file paperwork so you can maximize the benefits you’re entitled to. Now, wasn’t that easy?