Valley First

Making sense of business insurance

Small business advice—Making sense of business insurance

Myers Bennett—Commercial insurance manager

Let’s be honest, insurance can be confusing. There are hundreds of providers, types and levels of insurance – often with specific requirements that can make or break the policy. For the small business owner, knowing which insurance is a must-have and which they can do without can seem like a shot in the dark. Here are a few considerations that will help make purchasing business insurance easier – and potentially reduce the cost as well.

Must have: Business interruption insurance or loss of income insurance

Every business, regardless of size, needs business interruption insurance or loss of income insurance. Small businesses, especially, have a harder time recovering after a loss, and they’re more likely to close after a major loss has occurred. Should an unexpected loss or event force you to close your doors, business interruption insurance or loss of income insurance can replace lost revenue, profit, and may pay expenses to allow you to resume business more quickly.

Consider payroll insurance

Similar to business interruption insurance, payroll insurance offers funds to pay your employees, as well as yourself, while your business recovers from an unexpected event. Payroll insurance also helps ensure that your employees don’t look for work elsewhere, and can save you the expense of hiring and training new staff.

Don’t consider yourself immune from lawsuits

All businesses have some level of risk for a lawsuit. These can result from many things, such as negligence causing bodily injury or property damage due to everyday operations. That’s why it’s important to have commercial general liability coverage in place. Should a lawsuit occur, your insurers have the legal expertise to help launch a defense and will cover the costs as well.

Reduce the cost of your insurance through loss prevention

Loss prevention provides the best line of defense and often comes with the added bonus of decreased insurance premiums. In fact, the savings will often pay for many of these investments within only a few years. Here are a few loss prevention ideas you may want to consider.

  • Install approved sprinklers, intruder alarms and fire alarms
  • Secure all doors, windows and skylights
  • Secure storage and other low-traffic areas
  • Isolate flammable materials and dispose of waste materials properly
  • Make building maintenance a priority (electrical services, heating, roof updates)

Look for irrelevant or repetitive coverage

Businesses change over time, sometimes dramatically, and failing to review insurance coverage regularly can leave you with irrelevant or repetitive coverage. For example if an office moves locations, closes down, or gets outsourced it may be that there are policies that can be eliminated. Make it a habit to review your insurance policies on an annual basis.

Have you stayed with one insurer for several years?

Some insurance companies reduce their premiums for every year that you have been a customer. Loyalty can also rule in your favor when it comes to grey areas of coverage.

Review your policy with your insurance broker

Take the time to review your policy with your insurance broker on an annual basis. Through this process, your insurance broker may learn something about the business they didn’t know that may result in lower premiums.

Myers Bennett is a manager of commercial insurance with Valley First. He has more than 30 years experience in commercial insurance, has owned and operated insurance branches in Central B.C. and worked in the private sector as well as in the credit union system.

 

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