Many people dream of running their own business but often don't think of the consequences pursuing such a venture might bring.
Whether it's the cupcake shop you've dreamed of opening since you got your first Easy Bake Oven or following in your family's footsteps and opening your own law firm, becoming a business owner opens doors to a new world of responsibilities — some obvious, others, easily overlooked.
Take insurance, for example. Whether it's because the jargon takes too much effort to decipher, you don't have extra money to invest in a policy or you've simply overlooked an aspect that needs coverage, many small business owners tend to either over- or under-insure their business simply because they haven't properly equipped themselves with the knowledge of what they need to succeed.
Before running away from the crazy and sometimes confusing world of insurance, take a look at these simple steps that can help ease your way into choosing the right policy for your small business.
Making a list of everything you need to insure will help you when deciding what kind of policy you need. Include contents, equipment, inventory, separate premises/rental facilities, employees and your house if running a business from your home. Extra expense insurance is available to cover costs to get your business back up and running immediately after a loss occurs. Business interruption insurance is also available to compensate for loss of income while your business is shut down following an insured loss.
Accidents happen, and if you're not properly covered, liabilities can turn into a legal nightmare if bodily injury or property damage results from a business interaction. Make sure you have adequate coverage. Errors and omissions coverage can cover damages and defence and can also be purchased if you act as a consultant or offer professional advice to clients.
Take a look at your business, and identify your risks. Do you have employees? If yes, your risk of fraud and injury claims can be higher. If you can lower your risk for filing claims, you'll most likely be able to lower your insurance rate.
If you're confused about anything in your policy, don't hesitate to ask questions — that's what your agent is there for. Don't forget to review your policy biannually and to make changes to your policy as your business changes.
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