Starting a business and growing it from the ground up can be very exhilarating, but as you build your company, it is important to think about potential liabilities. Purchasing commercial insurance is an important step in protecting your business financially. Use the following tips for buying commercial insurance.
Start With Basic Protection
As you learn more about commercial insurance and continue to grow your business, it is best to start out with basic commercial coverage by purchasing a business owner's policy. When you buy a business owner's policy, you will have a policy that provides both general liability and property protection. Depending on how large your company grows and how many employees you have, your insurance broker may eventually recommend addition commercial insurance policies that provide extra protection for your situation.
Don't Make Cost a Deciding Factor
As a small business owner, it is normal to want to keep expenses down and maintain a balanced budget. But when it comes to operating expenses, it is not a good idea to skimp on your commercial insurance policies. Instead of looking at price alone and choosing the cheapest commercial insurance policy, make sure you take the time to research different quotes so you can buy a policy that is a good value and provides the type of coverage that you need.
Don't Be Alarmed by an Audit
In a lot of situations, the price quoted for commercial insurance policies takes gross annual sales into account. If you are a new small business with limited financial documentation available, your premiums will likely be calculated according to estimated annual sales. At some point during your commercial insurance policy period, there is a good chance that you will be audited by the insurance company. During this audit, your actual sales figures will be analyzed, and your insurance premiums may be adjusted.
Be Prepared for the Worst
The day your small business starts to turn a healthy profit can be a dream come true. But with success comes responsibility. It is important to think about the financial ramifications for your small business should something happen to you or any business partner you may have. Speak to your commercial insurance broker about taking out life insurance policies and long-term disability policies to cover any unexpected accidents, deaths, or disabilities, that may happen to you or a business partner and thus harm your small business in the future.
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