How to Get Business Insurance

No matter your business's size or niche, it must be protected by the right business insurance policy. Having coverage can help your business get the reimbursement it needs after many types of hazards, ranging from common to unexpected, from fire damage to employee lawsuits. But if you've never had to shop for business insurance before, the process might seem intimidating or overwhelming.

A local independent insurance agent can help compare business insurance policies and quotes for you, or you can do the research yourself. We're also here to help with our handy guide on how to get business insurance. Follow these five steps to find business insurance today.

How to Get Business Insurance: Five Easy Steps

The process of buying business insurance can be greatly simplified and streamlined once it's divided into clear-cut, easy-to-follow steps. Keep this guide handy when it's time to get business insurance.

Step One: Understand What Kinds of Business Insurance Exist and Which Are Legally Required

The first step is to understand what kinds of business insurance exist. Becoming familiar with your business insurance options can help you start to anticipate which types of coverage your specific business may need in case a disaster occurs. Further, it's critical to be aware that certain types of business insurance are actually required in many cases. 

Here are some of the most common forms of business insurance:

• General liability insurance: This covers expenses related to third-party claims of bodily injury or personal property damage, including your business's legal defense in case of a lawsuit.
• Professional liability insurance: This covers expenses related to third-party claims of professional errors and omissions made by your business that caused harm, including legal defense costs in case of a lawsuit.
• Business interruption insurance: This covers ongoing expenses and lost income during temporary business closures due to covered disasters like fire damage.
• Commercial property insurance: This covers your business's property, including buildings, tools, equipment, and inventory, against many types of loss, damage, and destruction, including theft, fire damage, and more.
• Commercial auto insurance: This covers any company vehicles against many different expenses, including accidents, theft, lawsuits, and more.
• Cyber liability insurance: This covers expenses related to data breaches and cyber-crimes that may expose or distribute private or sensitive data stored by your business, such as customer credit card information.
• Workers' compensation insurance: This covers employee medical bills and provides partial wage replacement in case a worker gets injured or ill due to their job duties or work environment. 
• Business owners policy: This is a convenient package of business insurance coverages needed by small businesses, typically including commercial property insurance, general liability insurance, and business interruption insurance.

In many cases, certain types of business insurance are required by law. For example: 

• In most states, workers' compensation is required for most businesses that have at least one employee, with limited exceptions. 
• Regardless of industry, your business may also be required by its customers or clients to provide proof of general liability insurance before a contract is signed. 
• If your business rents or leases its buildings or other property, the lender likely requires commercial property insurance.
• Businesses that offer professional advice or counsel services may be required to have professional liability insurance.

Be sure to get familiar with any business insurance requirements that may apply to your specific business. If you're uncertain which types of coverage are required or just recommended, an independent insurance agent can help.

Step Two: Understand Your Industry's Risks to Determine Which Types of Business Insurance You Need

Depending on your business's industry, your coverage needs will vary. For example, while a therapist or counselor needs professional liability insurance to properly address their risks, a bakery owner wouldn't need this coverage. 

Your unique industry also affects how much coverage you need in various categories. If your business has a lot of valuable or expensive property, such as an art gallery, you'll need a lot more commercial property insurance, and likely even endorsements, than smaller businesses with less property to protect.

If your business manufactures or distributes products to the general public, it can benefit from having product liability insurance to protect against harm these products may cause. Businesses that rely on employees to use their personal vehicles for occasional work errands or services likely need non-owned or hired car insurance. 

Further, if you run an auto repair shop or another business that temporarily holds customer vehicles, you'll most likely need garagekeepers insurance. 

Once you've identified your business's industry or niche, determine the specific risks that could lead to financial losses. This will help you determine what kind of business insurance to buy. An independent insurance agent can assist you with this process.

Step Three: Overestimate Your Insurance Needs and Prioritize Coverage Over Cost

When looking for business insurance, your business's budget is likely to be a consideration, which is understandable. Though it might be tempting to find the cheapest business insurance around so you can satisfy any legal requirements for coverage, this isn't usually wise. 

Remember that just one lawsuit or another unexpected disaster could lead to tremendous financial losses or even bankruptcy if your business lacks the proper coverage. For this reason, it's typically a safe practice to overestimate your insurance needs and prioritize getting plenty of coverage rather than aiming to save as much money as possible. Also, keep in mind that you might be able to deduct your business insurance expenses from your annual taxable income.

Still, there are ways you can reduce the cost of your business insurance without skimping on coverage. Take some time to learn what might affect your business insurance rates so you can take measures to be offered cheaper coverage. 

For example, if your business has employees, conduct annual safety trainings and make the effort to create the safest environment possible for your workers. This can help greatly reduce the cost of various types of business insurance coverage, including workers' comp. You can also typically save money on commercial auto insurance if you only hire drivers with spotless driving records.

When you purchase business insurance, you'll select not only your total amount of coverage but also your policy's deductibles. If you choose a higher deductible amount, your overall premiums will be cheaper. While this may be tempting, keep in mind that you're required to pay your deductible each time you have to file a claim. 

Consider your business's budget and the amount it could reasonably afford to pay if you had to file a claim. Slightly more expensive premiums may be worth a lower deductible in certain cases.

Step Four: Shop Around and Compare Multiple Quotes

When shopping for business insurance, it's a good idea to compare quotes from multiple insurance companies. Don't be tempted by the first offer you see. Take some time and really evaluate not only the price you're quoted but also other factors about each insurance company, including customer reviews, official ratings by companies like AM Best and the Better Business Bureau, customer service options and availability, and claims reporting services. 

For example, you might want to choose a policy from a carrier that offers 24/7 claims reporting by phone or online rather than one that only provides phone service at limited hours during the week.

Comparing quote options can help you determine which business insurance policy is best for your unique business. Of course, you'll need to weigh which policies can fit within your business's budget. Don't forget to consider not only premium costs but also policy deductibles. 

Also, when researching various business insurance companies, compare each carrier's business insurance discounts. Some insurance companies provide multiple ways to score savings on commercial coverage, while others provide few to no discount options.

It's also necessary to stress the importance of working with top-rated insurance providers. Though cheaper insurance companies that offer fast online quotes may be tempting, it might end up costing your business a lot more in the long run if you don't get set up with quality coverage. 

Make sure to find a trustworthy carrier with an excellent reputation. These insurers are much more likely to deliver on coverage promises and make claim payouts when you need them.

Step Five: Buy Your Business Insurance Policy and Review It Thoroughly

After selecting the right carrier and quote for you, it's time to buy your business insurance policy. Some carriers allow you to do this online, while others require you to contact them over the phone. An independent insurance agent can also help you buy business insurance.

Once you've purchased a policy, make sure to read it in-depth. Become familiar with your policy's coverages and exclusions, including its coverage limits, premiums, and deductibles. 

Ask your carrier or agent about any additional types of coverage that may be necessary to fill in any gaps. Knowing exactly what's covered by your business insurance can help you avoid unnecessary headaches if you ever have to file a claim.

Make sure to renew your policy annually and keep your coverage up-to-date. If your business's operations change, you may need to update your coverage. 

You should also always update your coverage if your business adds more property, such as additional company vehicles or expensive inventory. An independent insurance agent can help you with this as well.

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Don't Hesitate to Ask an Independent Insurance Agent for Help

Business insurance can be complicated, and there are many carriers and policy options to consider. Independent insurance agents know the ins and outs of commercial insurance. They’ll be able to explain, for example, when your general liability policy stops covering you and is picked up by your commercial auto policy. 

These agents also have access to multiple business insurance companies, so they're free to shop and compare policies and quotes for you. They can provide you with only the results that offer the best overall blend of coverage and cost.

Your agent can also advise you on how best to protect your business by recommending specific coverages. And if you do have to file a claim, you’ll have a trusted advisor to help you navigate the process and get your business back up and running as quickly as possible. Your agent can also help you update your policy as your business evolves.