How to Insure Your New Business: Do’s and Don’ts

Starting a business is not a decision made lightly. You’ve done your research and you’ve invested a lot, from your funds to your time. Now that your business is established, it’s time to consider business insurance to protect everything you’ve created.

Business Insurance Do’s

Here are the things you’ll want to do as you choose insurance for your small business.

1. Understand the Basics

   To protect yourself from the risks that come with owning a business, you first need to understand the different types of business insurance that are available.

   • Property – Protects your property and everything inside that helps you run your business.
   • Liability – Protects your business from the costs of covered liability claims and lawsuits.
   • Vehicle – A business auto policy includes auto liability and auto physical damage coverages for vehicles used in your operation.
   • Data Breach – Provides reimbursement for costs associated with investigating a data breach, notifying affected customers, restoration services for affected individuals and liability protection if someone accuses your business of a data breach.
   • Electronic Commerce – If you sell and accept payment online, consider this coverage. It protects from loss associated with data loss from corrupted software.
   • Employment Practices Liability – Protects you from employment related risk like lawsuits from employees related to discrimination, sexual harassment or other wrongful employment acts.
   • Workers’ Compensation – Coverage that helps you avoid business interruptions while an employee focuses on getting healthy and back to work after an injury or severe illness.

1. Know the Risks to Your Business

   Look at every area of your business to see where you may be at risk. Knowing where you’re vulnerable will guide in making business insurance decisions to make sure you have coverage where you are most at risk. For example, if you’re a florist who relies heavily on online orders, you’ll want to consider Electronic Commerce Coverage to protect you if your website goes down in the days leading up to Valentine's Day.

2. Work with a Professional

   When it comes to business insurance advice, an insurance agent is likely to be knowledgeable about what you need for business insurance. An agent is familiar with the unique needs of each small business and has an awareness of claims that have been previously processed. This point of view is helpful when anticipating where you may need coverage.

Business Insurance Don’ts

Be wary of the business insurance myths out there and avoid making these mistakes that could cost you down the road.

1. Underestimate Your Insurance Needs

It’s easy to think you don’t need certain coverages, especially if you have a home-based business or you’re just starting out. However, the basic coverage principles still apply and it’s likely that your small business could benefit from the same coverages that larger businesses use, just on a smaller scale. You want to make sure you have an understanding of where your personal coverages end and business coverage is needed to avoid finding out that there was a gap between the two when it’s too late.

1. Prioritize Cost over Coverage

   As a business owner, budget is always top of mind. Be careful that you don’t short yourself on coverage based on cost. Give yourself peace of mind and make sure your coverage needs are met instead of trying to fit within a specific business insurance cost. If you skimp on coverage, you may end up spending more money in the long run.

2. Overlook the Policy Details

   The details that make up your policy are important and require your detailed attention. Things like your deductible and coverage specifications can make a big difference when you file a claim. An insurance agent can walk you through the details of your policy so you feel confident in your coverage.

Put Protection in Place for Your Small Business

Securing small business insurance is the best way to protect your investment. Creating a plan will help you feel secure about the future of your company. Find a Farm Bureau agent who will work with you to learn your business and assess your coverage needs.