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How to Determine how Much Coverage I Need for my Business?

      By: Alex De Mostafa

The type and level of coverage you choose for your business will depend on a number of different factors, ranging from the size of your business to industry specifics. As a business owner, ultimately the decision regarding the level of coverage rests with you. The one certain thing is that you want to ensure that your business is adequately protected but at the same time, you do not want to be paying premiums for insurance components that have no relevance to your business. Here are a few things you should take into consideration when looking into business insurance:

Size of Your Business

Most businesses start out small, usually from home or a garage. For this reason, many entrepreneurs assume that their business assets will be covered under their homeowner's policy. This is not always the case. Unless business assets such as computers and other equipment are specified, they will not be covered under a general household policy. You may want to consider looking into "work from home" insurance policies. These are tailored for small start-up businesses, have the basic levels of asset and liability insurance, and are relatively inexpensive.

As your business grows, you will want to review your insurance to make sure you have adequate coverage. The minute you employ people to work for you, the level of liability on your company increases-not only from an employee point of view but also from a customer's perspective. When other people are involved in the work process, there is always the risk of human error. Your new employees may not be as committed to quality and you may find that you have product or service issues. In this instance, product liability insurance becomes very important. In addition, there is the added risk of injury to employees in the workplace, regardless of the industry you operate in. Workman's compensation is legislated in most states for full-time employees.

Type of Business and Industry

Businesses in different industries will be exposed to varying levels and types of risk, so it's natural the insurance coverage will be tailored accordingly. If you operate in a consumer market, it's likely you'll need a higher level and different type of liability insurance than if you are in a corporate environment.

For example, restaurants and bars that have a high volume of people through their doors would require insurance that covers equipment, food spoilage, customer or product liability, workman's compensation, and property insurance as a minimum. In addition to this, there are some insurance policies that are customized specifically for the hospitality industry.

Manufacturing businesses will have greater risks in terms of property, equipment and product liability.
Service-oriented businesses are likely to need less general insurance for property and equipment and will most likely have higher levels of liability insurance, with a specification for errors or omissions. In some professions, liability insurance is legislated such as malpractice insurance for medical professionals. Look at the characteristics of your business and that should give you an indication of possible risks.

Evaluate Your Business Assets and Perceived Risks

The level of insurance coverage will depend largely on these two factors. You will want to ensure that whatever business assets you have are protected so that you can consistently generate an income. An aspect of insurance that is sometimes overlooked is the cost of a business interruption. If, for example, an important piece of machinery breaks down, what will be the cost to your business now that you can't produce products while it is being repaired? The cost of not producing can sometimes cripple a business so it's important to be aware of such risks. The industry or region where you work may be susceptible to particular risks. Get information from industry associations and colleagues to help you assess and ensure that you have adequate coverage.

Call in the Professionals

Once you have completed a thorough analysis of your business, contact two or three different insurance companies for quotes. In most instances, they will send out an assessor to evaluate your business risks. Their expertise may highlight areas that you may not have thought of. Also, by getting more than one assessment and quote, you will be able to compare different insurance policies and evaluate which one will be most appropriate for your business. Remember that you do not want to be paying for coverage that has no relevance to your business. At the same time, you want to make sure that you have at least all the major risks adequately covered.

Article Source: http://www.dollarchurn.com/articles

Balcos Insurance is committed to ensuring their employees are the most professional, friendly and trustworthy insurance agents in the field. All Balcos Insurance agents have pledged to make sure you understand your washington auto insurance coverage options and provide you with an insurance proposal that has been personalized to your unique needs. Our experts are committed to getting you the best value for your dollar and the most complete insurance coverage possible. The reader assumes all responsibilities for his/her own actions in regards to any items discussed in this report. Adherence to all applicable laws and regulations, federal, state and local, governing the use of any product or service described in this report in the US or any other jurisdiction is the sole responsibility of the reader. The publisher and author assume no responsibility or liability whatsoever on the behalf of the reader of these materials. The reader is encouraged to consult directly with his/her insurance professional.

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