Top 8 Things to Know Before Purchasing Insurance for Your Retail Business
Did you know that 40% of small businesses are forced to permanently close their doors after a disaster?
Business insurance is imperative when it comes to protecting your business from unforeseen events like injuries or damage causing storms. Without this type of coverage, your business can end up in a great amount of debt if you are ever sued or need to rebuild.
There are many levels of difficulty involving these types of insurance, so you should always keep open communication with your insurance agent. In this article, you will find some tips to help you navigate through some of the complexities of retail business insurance. Just keep reading.
Insurance Tips for Retail Business
Insurance is one of the most important purchases you will need to make for your retail business. It’s important that you learn as much as possible before choosing your provider.
Here are 8 things to keep in mind while looking for coverage:
1. Know Your Risks
Before an insurance company decides if they want to cover your business, they will run an evaluation to see how risky you are. This evaluation is called underwriting.
Let’s say that the insurer decides you are a good risk. They will then underwrite a policy for insurance coverage. Every policy has a premium and deductible. These are words you will see often, so you need to make sure you understand what they mean.
The premium is the price you are going to pay on your insurance each year. Its value is dependent on several factors like the location of your business, the type of building it’s in, the amount of insurance you are using, and the local services for fire protection.
An insurance deductible is the amount of money you will be responsible for paying should you make an insurance claim. Keep in mind that the lower a deductible is, the higher the premium is.
The same goes the other way around too. If you can afford to pay a higher deductible then do it. This will save you money on your yearly premiums.
2. Shop Around
It’s hard to find the best deal possible if you aren’t shopping around. Get quotes from several different insurance companies making sure to compare things like:
- Payment options
- The sublimits of your coverage
- Cancellation penalties
- Deductible and premium pricing
When you are shopping around for business insurance you should speak with a specialist in your industry who will understand the problems that are unique to your type of business. This type of specialist broker can help you with getting the best type of coverage at the best rates.
3. Review Your Insurance Annually
Keep track of the changes made within your business throughout the year. Did you purchase new equipment or open a second location?
These are factors that might cause changes to your coverage. So, you should always report them to your insurance broker.
4. Understand What Types of Coverages You Need
The type of insurance a business owner needs is dependent on the way their specific business runs. These, however, are the types of coverages that are required of retail businesses almost everywhere:
Workers’ comp covers things like the medical bills, lost income, and rehabilitation for employees who are hurt on the job. It always pays death benefits for an employee’s family if they were to die on the job.
It isn’t mandatory for you to cover yourself as the owner in your workers’ comp plan, but you should.
Property is a must-have for small businesses. It will protect your building and everything in it from inventory to furniture.
Keep in mind that there are certain areas that might not be covered in a basic property insurance policy like damages from water and earthquakes. Make sure you review the paperwork carefully to make sure you have the coverage that makes the most sense for you and your environment.
General Liability Coverage
This type of insurance isn’t as common as property insurance is for small businesses. However, it’s the more important coverage to have because a claim from a serious injury can force most small businesses to close their doors.
General liability insurance is imperative for the owners of retail stores because it will protect your company from reputation damage after the injury of anyone on your premises who isn’t an employee, like customers and suppliers who enter.
5. Making a Claim
When you file an insurance claim, there are certain protocols you should keep in mind. To start, you should always keep detailed records of the transactions, inventory, and assets in your store. Keep this information in a safe place off-site.
This way, when you file your claim, you can file it quickly, follow up with your insurer, and hire a lawyer in a timely manner.
6. Overestimate Your Coverage Needs
To protect your business from a possible financial hardship, you should overestimate the coverage you need. That way, if a liability lawsuit filed against you, for example, you are covered for all the fees that are bound to pop up.
If you think your policy limits are too low, look into buying umbrella insurance. This type of coverage can extend your other insurances such as general liability, employer’s liability, and auto policies.
7. Read the Policy Thoroughly
Regardless of the type of policy you purchase, it will come with its own unique list of inclusions. The worst thing that can happen is that you’re caught off guard while filing an insurance claim because your policy doesn’t cover certain damages.
Always ask for clarification from your insurance broker if you don’t fully understand something.
8. Find An A-rated Insurer
Some insurance companies will try to win your business by using exaggerated sales pitches and information that isn’t completely true. The best way to make sure you are doing business with a legitimate company is to check for proper credentials and licensing.
Because the insurance industry is regulated by state governments, it should be fairly easy to find this type of information online through your state’s directory of licensed agents.
When it comes to ensuring your retail business, you need to make sure all your bases are covered from your employees’ needs to your inventory. Our insurance agents are here to help you lock down a great policy that will give you peace of mind.
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