After you figure out the types of insurance your business needs, assess whether your current policy is right for you. Too little insurance leaves your business vulnerable, while too much leaves you cash-poor from paying high premiums.
Industry experts advise that you consider these factors:
Actual value: When purchasing property insurance, know the true value of your property (what it would cost to replace it). Insure your most vital property for its full replacement value. Because that costs a lot, however, consider insuring only the property you absolutely need to continue running your business.
Lenders' stipulations: If you have a loan on property, the lender usually requires you to maintain insurance. If you don't, the lender may foreclose on the property or purchase insurance itself and charge you an exorbitant price for it.
Absolute minimums: When you're out shopping for liability insurance, check with your current agent to learn whether there are minimum insurance limits set by law. These are usually small, however, and you shouldn't expect them to cover you adequately in the event of a serious accident.Here are a few good questions you want to ask yourself. Read Needs To Know to match up with the insurance you need.
Sole proprietorships usually need more liability insurance because the owners run the risk of losing personal as well as business assets. Businesses that are incorporated, however, require less liability insurance. Put simply, if a corporation is sued, only its assets can be seized.
Employees: Are your employees experienced professionals or high school kids? Are they accident-prone? If bad things seem to happen to you or your staff, buy more insurance rather than less.