Business - Commercial insurance in NJ.
Five Tips for Buying Business Insurance.
1. Assess Your Risks
Insurance companies determine the level of risk they'll accept when issuing
policies. This process is called underwriting. The insurance company reviews
your application and determines whether it will provide all or a portion of the
coverage being requested. Each underwritten policy carries a premium and a
deductible. A premium is the price you pay for insurance.
Premiums vary widely among insurance companies, and depend on a number risk
factors, including your business location, building type, local fire protection
services, and the amount of insurance you purchase. A deductible is the amount
of money you agree when making a claim. Generally, the higher deductible you
agree to pay, the lower your premium will be. However, when you agree to take on
a high deductible you are taking on some financial risk. So, it's important to
assess your own risks before you go shopping.
The National Federation of Independent Businesses has created a Business
Insurance Coverage Checklist to help you assess your risks and to make sure
you've insured every aspect of your business.
2. Shop Around
The extent and costs of coverage vary from company to company. Some companies
specialize in insuring specific types of business, while others can connect you
with policies specific to your business activities. For example, if you operate
a tow truck service, you'll want to find an agent that can help find policies
that specifically cover automotive service businesses. Often specialist brokers
can get you the best coverage and best rates.
3. Consider a Business Owners' Policy
Insurance can be purchased separately or in a package called a business owners'
policy (BOP). Purchasing separate policies from different insurers can result in
higher total premiums. A BOP combines typical coverage's into a standard
package, and offered at a premium that is less than if each type of coverage was
purchases separately. Typically, Bops consist of cover property, general
liability, vehicles, business interruption and other types of coverage common to
most types of businesses. Bops simplify the insurance buying process and can
save you money. However, make sure you understand the extent of coverage in any
BOP you are considering. Not every type of insurance is included in a BOP. If
your business has unique risks, you may require additional coverage.
4. Find a Reputable Company
Commercial insurance brokers can help you find policies that match your business
needs. Brokers receive commissions from insurance companies when they sell
policies, so it's important you find a broker that is reputable and is
interested in your needs as much as his own. Make sure your broker understands
all the risks associated with your business.
Finding a good insurance agent is as important as finding a good lawyer or
accountant. You should always look for one that has a license. State governments
regulate the insurance industry and license insurance brokers. Many states
provide a directory of licensed agents. If you are looking for a new agent start
with your state's department of insurance.
5. Assess Your Insurance Coverage on an Annual Basis
As your business grows, so do your liabilities. You don't want to be caught
underinsured should disaster strike. If you have purchased or replaced equipment
or expanded operations, you should contact your insurance broker to discuss
change in your business and how they affect your coverage.
