A single spark can set a store on fire. A simple slip can lead to a long and expensive law suit. You can wake up the next day and your corporate car is not on its parking slot. If there’s one thing every business owner knows, it’s the fact that there’s nothing certain and it’s important to reduce risk to the very minimum.
Many business owners fall into the trap of not getting the appropriate business insurance coverage. Let’s dissect that statement further. It is not enough to ensure your business. Commercial business insurance should be your failsafe. Meaning, your business cover should be something that encompasses all possible scenarios.
Identifying All the Risks Associated with Your Business
The first step in determining the right business insurance for your enterprise is conducting a thorough audit of your entire business operations from start to finish. Make sure that no stone is left unturned. If you’re the owner, there’s a high probability that you may not be aware of everything that is happening in your daily business operations, so it is best to bring in all your managers as well as the key employees to ensure that you don’t miss anything.
Knowing the Different Types of Business Insurance
There are four major broad types of commercial business insurance.
The first category is probably the most common – business property insurance. Simply put, this type of insurance will give you monetary reimbursements, if your business properties (i.e. Your office, your machineries, etc.) were damaged or destroyed.
The second general classification of business insurance is liability insurance. If you injured a person or damaged a property during the conduct of your business, this type of insurance will take care of that. For example, if you’re a restaurant owner, and someone slipped within your restaurant because of a spilled drink, you can use your liability insurance to cover for the victim’s hospitalisation expense.
Third is the automobile insurance which is basically similar to your personal car insurance. It will cover the damages inflicted on your company-owned vehicles including those resulting from collision accidents.
Lastly, the umbrella commercial business insurance does not play a specific role. Rather, it extends the limits of your other insurance policies. It may also be used to cover other things beyond those which are covered by your liability, property and automobile insurance policies
Sufficiently Investing Towards Your Insurance Policies
By identifying all the areas in your operations that may cause financial losses to your company, you will be able to identify which types of insurance you need. Aside from selecting an insurance category, you likewise need to ensure that you are investing enough towards these business insurance policies.
For example, if you run a hotel business with several luxury cars to transport your guests, you should invest heavily on automobile insurance and the policy you should get should have a high premium. You can’t have a $30,000 BMW luxury sedan and just have $5,000 worth of automobile insurance.
At the end of the day, having the right business insurance coverage is your safety net if and when the worst case scenario turns into a reality.