Launching a new startup can be a mix of excitement and stress. The best way to lower stress levels is to reduce the risks your business might pose to your employees, customers, and other visitors. An enterprise that is well prepared for disasters will likely outlast many startups that try to cut corners on insurance costs.
Here are a few practical tips to help you buy the right small business insurance policy in Texas.
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Be aware of the different types of business insurance
There are several types of business insurance plans, many of which exist to supplement basic policies. It’s dangerous to assume that a basic business insurance policy will cover every possible costly nuance that your enterprise encounters. A few of the most common business policies are general liability insurance (GL) and business owner’s policy (BOP). GL protects your business against various types of lawsuits involving third-party injuries or property damage. BOP combines GL with commercial property insurance to protect your business against damage, loss, and theft.
While GL and BOP cover a broad range of business risks, there may still be gaps in your coverage, particularly if your industry has high risks, such as construction. A construction company must make sure its subcontractors have sufficient coverage in case they get injured on the job.
One of the growing risks that affects all businesses is cybercrime, as any electronic network can potentially be penetrated by hackers. Cyber insurance pays for damaged equipment and legal costs that might arise from a security breach. Another type of add-on policy to consider is errors & omissions (E&O), which covers lawsuits over work mistakes and negligence.
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Know your state’s requirements
If your company owns vehicles, you will need commercial auto insurance, which might be one of the few business insurance requirements in your state. Another main requirement includes workers’ compensation if you hire at least one employee. Check with your state to find out any other insurance coverage you may be required to carry.
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Understand the risks faced by your industry
Every industry presents some type of risk, with some being more dangerous than others. For instance, one of the most significant risks involved with running a restaurant is the possibility of food poisoning. Meanwhile, a shuttle service runs even higher risks, such as collision with another vehicle. Whatever the liability risks are, chances are there’s some type of coverage for it, such as umbrella insurance, which fills the coverage gaps of other insurance plans.
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Prioritize coverage over cost
When it comes to insurance, it is important to think first about risk management. What may seem like a monthly throwaway cost can be a company’s safety net down the road when an unforeseen mishap occurs, leading to a lawsuit. Legal fees alone can wipe out a small business, so it’s crucial to build a defense mechanism against future lawsuits.
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Know what can affect your insurance rates
Various factors affect business insurance rates, particularly a business owner’s history with filing claims. If you’ve filed several claims in the past, it can make insurers hesitant to accept your insurance application. A detailed claims history can also boost monthly premiums. Other factors that might affect your insurance rate include payment history, your business location, and the type of activity that occurs at the workplace.
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Think about your deductibles
Insurance policies typically include a deductible, which reflects the amount the policyholder pays upfront before the insurer takes over the remainder of the balance or pays up to the policy’s coverage limit. The advantage of a higher deductible is that it corresponds with a lower monthly premium. If you prefer to pay a lower deductible, then you will have to pay a higher monthly premium and vice versa.
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Get more coverage than you need
The reason it’s a good idea to overestimate your insurance needs is to make sure your business is covered for the worst possible lawsuits that can cost millions of dollars. Legal fees alone can drain a company’s capital even if it carries liability coverage. The problem is that some lawsuits may claim damages that exceed your liability coverage limits. Commercial umbrella insurance, though, may fill the gaps.
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Choose top-rated insurance providers
It’s imperative to purchase insurance coverage from an agency you trust. Look for an insurer who matches your checklist as not all insurers are equal, with some being more customer-friendly than others. It helps to assign your own ratings to different carriers based on how well they reflect your needs.
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Scrutinize the policy
No matter how busy your schedule is, you should take time to review all the details of your business coverage to avoid overlooking serious risks. You certainly don’t want to be caught unaware when you file a claim, only to realize that you forgot or were unclear about specific coverage details.
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Always ask for help
The worst thing you can do with business insurance is get intimidated by policy jargon to the point of ignoring significant details. Many businesses lack proper coverage because they fail to ask their insurance agents the right questions.
It’s crucial to review your insurance coverage periodically to make sure your business insurance in Mesquite, TX, reflects your unique needs. At Family Financial Insurance Group, we have your business covered at all times. Contact us today to learn more!