Business Insurance: 5 points to evaluate before hiring one!

No matter the size or size of your company, no matter how great a manager you are, unforeseen events and situations beyond your control can happen and put your assets at risk. At these times, the best thing to do is to have business insurance.

It will help protect your business in several areas, preventing physical damage to the building and even offering protection against risks that your company may cause to third parties. But, to guarantee all this, you need to choose the correct policy according to your reality.

Do you want to know more about business insurance and find the most suitable one for your company? Continue reading!

What is Business Insurance and why do I need to have one?

Business insurance is Multi-risk, multiple coverages in a single policy, which indemnifies the entrepreneur in cases of fire, theft, lightning and many other unforeseen and accidental events.

In general, business insurance has some types of protection, the most common of which are:

  • material damage: guarantees protection relating to losses that may affect your company’s assets, such as material assets, merchandise and raw materials, equipment, cash, payment of rent, whether the property is owned or rented;
  • civil liability: covers your company in cases where it unintentionally or accidentally causes damage to third parties or their property. Third parties can be your customers, suppliers or employees, for example.

Having business insurance is essential to ensure that your business will be able to continue to exist and prosper, even in situations that are out of control. If you are thinking about taking out business insurance, it is essential to understand what to evaluate

How to choose and take out Business Insurance?

Now that you understand a little more about how corporate insurance works, how about analyzing some fundamental steps to opt for the right policy for your reality? Check out!

1. Analyze which risks are of most concern

Insurance values ​​can change a lot depending on coverage and insurers, so it is essential to put your priorities straight.

Many insurance companies already offer different plans and conditions for small business owners, with comprehensive policies and coverage packages.

If your budget is tight, opt, at a minimum, for mandatory coverage, which guarantees that your business will be within the law, and coverage related to catastrophic events, such as Fire, Windstorm and Civil Liability.

2. Find out what coverage is present in the policy

Before making any decision, an important tip: ask the broker to offer you some alternatives, with a selection of different coverages and specialized insurance companies.

To decide on the most appropriate one, you can consider several points, such as the solidity and trust of the brand, good reviews from other policyholders, transparency in negotiations and, of course, the coverage present in the proposed insurance plan.

Sometimes, a small saving may not be so advantageous, as it could mean excluding important coverage for your field of activity.

For example, if you own a restaurant, it may be advantageous to have civil liability insurance, protecting your business from a customer complaint regarding the quality of the product or service.

This action could mean the difference between your clientele leaving your business for the competition or remaining loyal to your establishment.

Another point worth highlighting is the insured value. To save money, some business owners end up declaring a lower value than the company’s actual value, which will, in turn, guarantee a lower covered value. This practice, in some cases, may even represent a greater reduction in compensation due to the application of a penalty called an apportionment clause.

Better than taking out inadequate insurance is to seek the advice of a specialized broker to correctly size the insurance coverage to your budget.

3. Understand what insurance is mandatory for your sector

For your business to be fully regular, it is also important to find out whether any insurance policies are required by law or union agreement.

However, there is no definitive list that is the same for everyone, as this coverage varies according to the business’s area of ​​activity.

So, before making any decision, research to understand which insurance is mandatory for your industry.

4. Understand how insurance pricing was established

If your company has already carried out its financial planning , it must be prepared to control its cash flow and reduce costs. This includes the cost of insurance as well. In any case, the price of insurance, in general, is calculated according to the probability of a claim occurring, the maximum probable damage resulting from it and the claims experience of each insurer.

To do this, insurers assess all the risks your company faces, the way you deal with them and what the consequences will be if they occur, and can carry out specialized risk inspections.

For example, an employer’s liability risk is directly related to an employee’s likelihood of sustaining an injury or contracting an illness due to the nature of their work.

Other points that can be analyzed are: the structure of the building where your business operates, the location and the annual gross profit.

Therefore, always provide all the information requested by the insurer, to ensure that the insurance quoted will be in accordance with the reality of your business and will be really useful when you need it.

5. Find out what you can do to minimize the value of your insurance

As you have seen, there are many items that are considered to form the amount of insurance to be paid and you, as a business owner, can make improvements to the security of your building and your activity, thus ensuring a good risk assessment and a good price. fair.

In general, insurance brokers can help you identify the risks to which your business is most exposed, but there are some simple measures that you can implement, such as:

  • protection against vandalism and theft (ensuring access control and installing a security system, for example);
  • fire protection (keeping protective equipment, such as fire extinguishers and fire hydrants, and fire doors in good condition and inspected);
  • protection against weather phenomena (with correct lightning rods, inspection of structures and roofs).

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