10 Essential Tips for Buying Small Business Insurance

Different industries face unique risks that influence the type of insurance needed.

For instance, accountants need professional liability insurance to cover claims of negligence or errors in their work. Restaurants, on the other hand, may require product liability insurance to protect against claims related to foodborne illnesses or accidents.

Tailoring your insurance coverage to your industry’s specific risks ensures comprehensive protection.

Prioritise Coverage Over Cost

While it may be tempting to opt for the cheapest insurance policy, aim for adequate coverage.

An insurance industry survey should just 43% of small businesses believe they are fully covered against insurable business risks. It found that about a third admitted they lacked a plan if something untoward happened.

Being underinsured means your business could face significant financial losses if a claim exceeds your policy limits. Investing in comprehensive coverage assures you peace of mind and safeguards the future of your business.

Factors Affecting Insurance Premiums 

Insurance premiums are influenced by various factors including:

• Business size
• The value of your operations and assets
• Your appetite for risk
• Coverage level requested
• Discounts (such as for paperless billing, packaging policies together, etc), and
• Claims history.

Businesses with significant risk exposures or those with a history of claims may face higher premiums. Implementing risk management practices, such as improving workplace safety and maintaining a clean claims record, can help lower your insurance costs.

Consider Your Deductibles

Choosing higher deductibles can lower your insurance premiums. Deductibles are what you pay as the policy holder before your insurance kicks in. But it’s important to balance this with the potential out-of-pocket costs in the event of a claim.

Assess your financial capacity to handle higher deductibles and find a balance that suits your budget without compromising coverage.

Overestimate Your Insurance Needs

Adding in a contingency for unforeseen factors can protect against unanticipated liabilities.

Consider commercial umbrella liability insurance or excess liability insurance, which offers extra coverage beyond the limits of your standard policies. It can help ensure your business is well-protected against significant claims.

Choose Reputable Insurance Providers

Selecting an insurer that is APRA regulated (including Lloyd’s) is critical. Where your risk is of a type that requires the placement with an Unauthorised Foreign Insurer (UFI) we, as your broker or adviser will ensure that the UFI is financial-stable and well-rated.

That’s where we, as your broker or adviser, come in. We live and breathe insurance so are across the policies and what they cover for your industry as well as others.

Not only do we help customise a range of policy options for your unique business, but also help you review and update your policies over time, plus play a role in managing any claims you need to make.

Read Insurance Policies Thoroughly 

Understanding the terms, conditions, and exclusions of your insurance policies is vital. This takes time and expertise because these documents abound in technical terms that may not mean what the average person thinks they do.

As your broker or adviser, we go through the fine print to help you clarify any complex details. This ensures you’re in the know about what is covered and any potential gaps in coverage.

Seek Professional Help

Having a broker or adviser like us on side can help you compare quotes and policies.

Insurance is a vital investment in your business’s stability and growth can protect against unforeseen financial setbacks and ensure long-term success. Let us help you through the insurance selection process.