Often I hear from small business owners that look into purchasing business insurance after operating said business for a year or two. It usually happens when they are doing a B2B contract where the other party requires a certificate of insurance, and the business owner is scrambling to purchase coverage in order to satisfy that requirement.
If you are looking to start a business (ANY kind of business), talk with an insurance broker while doing your business plan. Every business plan should budget for insurance, whether it is general liability for an office or storefront, or products-completed liability if you are selling a tangible product. For consultants or professionals that offer a non-tangible service, often it is recommended to have professional liability or errors and omissions insurance.
Either way, do not put off the insurance. While you think it may be a “low-risk” business and the insurance will be inexpensive, that is not always the case, as insurance companies look at risks differently than you and I do. It can be difficult to find a carrier that will take on the risk for certain businesses. Unique businesses may fall into what is called “excess and surplus lines” of insurance, requiring much higher insurance premiums than a basic policy.
The world of commercial insurance can be time-consuming, and often takes a month or so to find interested insurance carriers, obtain quotes, fine-tune the coverage, and eventually bind the coverage. Allow an adequate amount of time for you AND your broker to help you find the right coverage. A few weeks to a month is a safe bet.
Like any other business, insurance companies often have “niches” with the types of businesses that they insure. Example, many companies are not interested in trucking companies, however, some insurers specialize in that industry. Working with an insurance broker that has many markets available will allow you to find multiple insurance options to fit your business’s needs.
If you are curious about potential insurance premium costs for a startup business or existing business, call Tom today!