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By SCORE, Service Corps of Retired Executives
A lifetime of hard work can be lost in a few minutes if your insurance policy
omits important elements. Sound insurance management for your business is fully
as important as good financing, marketing, personnel management, or any other
key aspect. Like these other functions, good insurance for the business doesn't
just happen.
A good insurance plan guards your business. Some risks are obvious: fire,
theft liability. But your checklist should not be limited just to the obvious.
If you use special tools or equipment in your business, you may need special
insurance covering them. You may also need business interruption insurance, if
you may have to close down your firm for a period of time.
Get a professional into the picture early. Insurance is a complex, detailed
subject and a professionally qualified broker, agent or consultant can explain
the options, recommend the right coverage and help you avoid financial loss.
Before purchasing insurance, consider all the possible ways of holding down
the costs. Maybe it's not reasonable to cover all perils. Cover the most risky
and largest peril first and work down the line, don't get needless coverage, but
don't try to save money by under-insuring or by not covering some risks that
could cause significant loss, even if you believe the probability of their
occurrence is small. If the probability is small, the premium will be also. Use
as high a deductible as you dare.
Many package policies are suitable for small businesses they're designed to
service, and usually it is less expensive to add riders than it is to get a
separate policy for some risk not covered in the package. This generally means
you should buy all your coverage from a single agency or broker. But if you do
opt to purchase more than one policy, avoid duplication of coverage. Make sure
the same risk is not covered under two different policies.
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