You’re the proud owner of a new small business – congrats! It’s no small feat or easy effort to get a business off the ground.
But nothing can quite derail your grand opening like an accident or lawsuit.Before you cut that ribbon, it’s worthwhile to research and invest in new business insurance. Here’s a checklist to help you find small business insurance at the right price.
1. Compare rates.
Don't just go to the agent you bought your personal car insurance from. It's often faster and cheaper to shop around online. Compare multiple insurance quotes to ensure you’re getting the best deal. Remember: the cheapest deal isn’t always the best one, especially if you’re getting subpar coverage.
Recommended reading: “The Small Business Guide to Cutting Insurance Costs.”
2. Check your state's Workers' Comp laws.
Nearly every state requires some form of Workers’ Compensation Insurance – even if you only have one employee. Take the time to properly classify your employees so you aren’t subject to worker misclassification fines. Find a summary of your state’s regulations in our guide “Workers’ Compensation Laws by State.”
Recommended reading: “5 Key Things to Know about Workers’ Compensation Insurance.”
3. Check any existing contracts you have.
Take a look at client contracts or the lease for your business space. Do they require you to have insurance protection? If so, you need to make sure your coverage fulfills those obligations. New business insurance can also help you land client contracts by proving you have coverage to back up your work or services.
Recommended reading: “When Does a Small Business Need Insurance?”
4. Check your Homeowner's or Renter's policy.
If your business is home-based, you probably need business insurance. Most Homeowner’s or Renter’s policies do not cover business items or risks. Look over the fine print of your existing policy to see if you need additional coverage.
Recommended reading: “Have a Home-Based Business? Your Homeowner’s Insurance Might Not Have You Covered.”
5. Read up on the basic policies.
If you’re new to the world of small business insurance, brush up on the basics. Many small-business owners carry...
- General Liability Insurance to cover third-party lawsuits over property damage, bodily injuries, and advertising injuries.
- Business Owner’s Policy for the protection of General Liability and Property Insurance in one affordable bundle.
- Errors & Omissions Insurance (also called Professional Liability Insurance) to help pay for lawsuits over their work.
E&O is mostly for professionals, while GL and BOPs are beneficial for small-business owners of all walks.
Recommended reading: “The ‘Legal-Ease’ Glossary: Helpful Small Business Insurance Terms and Definitions.”
6. Check what’s popular.
Use Insureon’s Policy Analyzer to see which insurance policies are most popular for business like yours. Just input your industry, number of employees, and revenue to see the top small business insurance choices. Remember: every business is different, so these policies may or may not fit your particular business’s needs.
Recommended reading: “What Kind of Business Insurance Do I Need?”
7. Get an idea of your budget.
Wondering how much all this new business insurance is going to cost you? Check out Insureon’s 2014 Business Insurance Cost Analysis for a breakdown of insurance costs by policy. Keep in mind that business insurance may be an investment, but it helps you manage exorbitant costs in the long run.
Recommended reading: “How Much Does Small Business Insurance Cost?”
8. Talk to an insurance agent.
No one expects you to be an insurance virtuoso. Contact your insurance agent when you need help understanding your policies and coverage options – it's their job to know these things. And don't forget to pick their brain on ways you can save on coverage.
Recommended reading: “How an Insurance Agent Can Help Small Business Cut Insurance Costs.”