When you start a small business, every single cent counts. Insurance, as necessary as it may turn out to be, is often last in the list of expenses of businesses starting up. Carol Wilson explains why you should not write it off as a luxury.
In today’s economy, establishing and building a small business is no small feat. As job rates only grow very slowly and qualified individuals continue to quickly enter the job search, more and more people are finding themselves in positions where employment is elusive and self-employment is tempting. That being said, small business ownership is an extremely rewarding and exhilarating process. While challenges can be greater, reward is often greater as well.
Running an intelligent and consistent business requires putting in a lot of forethought and protecting that venture properly. Small business insurance can be one of the most important elements in creating a strong and sustainable small business. Before writing off business insurance as a luxury you just can’t afford, i’t important to educate yourself on the basics.
Types of small business insurance
There are many different types of business insurance available to different businesses. Understanding the various types of insurance offered is the first step to choosing coverage and finding a plan that fits your needs. There are a few primary types of business insurance that small business owners should specifically look into.
This insurance can be extremely worthwhile for certain types of small businesses. Businesses that run out of a storefront and welcome customers on the premise can strongly benefit from liability insurance. If a customer slips or hurts themselves on your business premises or your product is defective and causes some sort of harm to a customer, business owners can encounter some very serious and stressful struggles. Liability insurance covers accidents that might occur as a part of your business. This type of insurance should be considered by any small businessperson who sells a product or runs a customer-based business.
2. Home-based insurance
With so many entrepreneurs tackling their business matters from home, home-based insurance can be extremely useful for the modern small business model. This insurance helps cover some of the losses that can occur when running a business out of your home. It’s important to understand that home insurance will not cover most of the losses that occur in a home business situation. Working from home and running a home business absolutely can have some advantages, including lower upfront costs. However, risks are involved that you should consider and research.
3. Catastrophic loss
This type of insurance helps businesses avoid major losses due to some sort of catastrophic loss. While catastrophes are never expected, they can happen. In the case of a fire, flood, or other natural disaster, catastrophic loss insurance can help a business repair damages and get back on their feet. This should be considered by any small businesses that are maintained in high risk areas and regions.
The pros and the cons
There are several advantages and disadvantages to small business insurance. While it is always (always) important to think ahead and be prepared for complications that might occur in business, insurance can also be costly for new entrepreneurs. Consider the pros and cons.
Yes, business insurance is going to have an upfront cost. You should evaluate your business finances to see if the initial costs are something your business can manage. For the most part, that initial cost is likely something worth dealing with. Business insurance is an essential element in developing a company or business that is long-lasting and sustainable. With business planning, you should think long term, not short term for most things. Though the cost is difficult up front, the long term benefits typically outweigh that cost. Protecting yourself with insurance measures is indicative of a smart and business savvy business perspective. You want to build something that can last, not just something that works then and now.
Ways to save on small business insurance
There are many ways that small business owners can reduce the costs of business insurance. As we all know, saving money is an important aspect of running your own business, particularly in the beginning stages. To save money shop around carefully and be sure to compare insurance quotes from multiple providers.
You can also look into increasing your deductible to save money up front. Consider packaged deals that can have a lower premium cost such as a Business Owner’s Policy.
Lastly, to save on insurance costs be sure that you reduce your loss risk with proper safety measures. Install fire sprinklers, security systems, and other safety devices. These can allow insurance discounts.
Carol Wilson is a freelance writer and blogger that specialises in topics related to the business world, including marketing, entrepreneurship, small business ownership, and even business insurance. She welcomes your comments at [email protected].