Insurance Tips for Home Business Owners
If you’re the owner of a home-based business it’s important to save money wherever possible. Getting the best deal on insurance is one of the things you should strive to do. Following are some insurance tips for home business owners.
Necessary Coverage
There is a difference between what you want and what you need. In order to operate a home business efficiently, you need to watch your overhead. That calls for you to only buy what’s necessary, and forget about the frills. When talking about insurance coverage that means making sure you have enough coverage without spending more than you need to.
Types of Insurance
Basically there are three types of insurance your home-based business will need. They are pretty much the same as any homeowner would carry: property, health, and life. Property insurance will protect you in the event someone is injured while on your property. Health insurance will provide you with a source of income and pay medical bills if you’re injured or become sick. Carrying sufficient life insurance will mean your family will be financially protected if you pass away. A fourth type of insurance that most homeowners carry is vehicle insurance. If you don’t use your vehicle for business purposes you won’t have to include it in your business insurance policy. If your home business makes a product or sells a service, you may also need to look into liability insurance, which will protect you in the event of a lawsuit.
Decide What Your Needs Are
Knowing what you want and deciding on how much of it you need are two different things. Since you know you will need property, health, and life insurance, you now have to decide on how much of each type to buy. Develop a checklist of possible problems that could pop up under each category of insurance. Carefully determine how likely those potential problems could be, and decide how much of each type would be prudent to carry. Your answer is totally subjective–there is no definitive way of knowing if you’ll ever need the coverage, but the old adage of better safe than sorry should be a guiding principal.
High Deductibles, or Low Deductibles–That Is the Question
One of the most difficult decisions to make when taking out insurance coverage is whether or not to take a chance on a high deductible policy. It is an accepted procedure within the insurance industry to offer lower rates for high deductibles. While this sounds good on the surface, it could lead to disaster if you have a lot of little problems that require you to file multiple claims. With a high deductible policy you would have to pay a lot of money out-of-pocket for each claim, which would negate any savings you previously enjoyed. On the other hand, if you’re fortunate enough to have a minimal number of claims you will have saved a lot of money on insurance premiums.
Dedicated Savings Account
One way you can improve your chances of making the right decision is to go with a high deductible policy while at the same time protecting yourself by opening a savings account for emergency use only. This type of dedicated savings account will not only allow your money to make money until it’s needed, it will let you enjoy the reduced insurance premiums from a high deductible policy. If you go this route you will need to use the self control necessary to leave the money in that account alone unless and until you actually need it.
Shop for the Best Deal
After you’ve determined what type of coverage you will need, and the amount you feel comfortable with carrying, it’s time to find an insurance company that will offer the policy you want at a reasonable price. That means you’ll have to go shopping. The first step is to get some price quotes from various companies. Going online and getting quotes is a fairly simple procedure, and will provide you with a starting point. Start calling various insurance companies and explain your needs. Compare the insurance quotes you get from the brick and mortar companies with the online prices you’ve attained and make a determination on a carrier. Don’t sign any papers until you’re completely satisfied that you’re getting the coverage you need at a price you’re comfortable with.
Guest post from Bailey Harris. Bailey enjoys writing about business, insurance, finance, and related topics.
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