Business insurance like many types of expenditure is one of those items that business owners typically do not like to pay. You must remember that sufficient insurance can be as critical to the success of your business as a good product or service. Without proper insurance you could lose all the money, time and effort you put into your company.
The types and amounts of coverage you purchase must be evaluated on a cost – benefit basis like any other commodity that you purchase. Your insurance broker can help you review the amount of coverage your business requires.
Usually you will want to insure against risks that could have significant detrimental impact on your business. This normally would include items such as fire, storm damage, theft, employers’ public liability and products liability.
Depending on the nature and size of your business it is often a good idea to self insure for all or a portion of certain losses. Self insurance can be accomplished by not buying cover for incidental risks or by increasing the deductions on policies that you buy. Often raising the deductible (excess) can have a very favourable impact on the policy premium.
The administrative cost to the insurance company to process small claims is quite high; consequently the rates typically go down substantially if they are relieved of this expense by insuring losses in excess of a sizeable deductible amount. An insurance broker can provide you with comparative costs for various types of cover and varying degrees of deductible amounts.
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