When you work for someone else, your employer provides a basic level of insurance coverage to protect you and your family. Whether it is life insurance worth one to two times your annual salary or disability coverage that pays part of your salary when you are laid up, this basic insurance is designed to give workers peace of mind and increase their loyalty to their employers.
When you run your own business, you cannot rely on anyone else to provide the insurance coverage you need. Instead, you are responsible for providing insurance protection to yourself and your workers.
That is why it is so important for small business owners to review their insurance coverage on an annual basis. Whether your business is brand new or has been in operation for many years, an annual insurance checkup is the best way to make sure you have the coverage you need and that you are not paying more than you should.
The start of the new year is the perfect time to review your coverage and look for additional insurance you may need. Here are some tips you can use to get started.
Start by reviewing your life insurance coverage. Experts recommend that employees have coverage equal to at least 5 to 10 times their annual salary, and you can use that guideline for determining your own life insurance needs. If you find that you need additional coverage, the new year is the perfect time to contact your agent and discuss an additional purchase.
If you have employees, make sure you have enough liability coverage to protect yourself and your operations. One workplace accident could severely damage your business and even put your personal assets at risk, and you do not want to take any chances.
Talk to the company that provides your automobile insurance to see if you need additional coverage for business use of the vehicle. Make sure the agent knows how and when you use your personal car for business purchases.
Make sure your property insurance is up to date and that it provides sufficient coverage for your business and the equipment inside. You can use your most recent financial statements and tax returns to determine the optimum level of coverage and make sure you are getting the most for your money.
Review your health insurance costs and coverage options for your employees. Businesses over a certain size are now required to offer coverage to their workers, and you need to make sure you are complying with the law. Contact your insurance broker to discuss your options and find the most cost-effective solution.
Consider bundling your coverage. Combining coverage can save you a lot of money and lower your overall costs. Ask your agent about bundling and how it could save you money.
Make sure your deductibles are appropriate. Raising your deductible is one of the most effective ways to lower your monthly premiums. Review the deductible on each of your insurance policies and weigh the potential savings against the added risk.
Running a small business can be tough, but finding the right insurance coverage does not have to be. Checking your coverage and deductible levels at the start of each new year is the perfect way to make sure you have the protection you need and that you are not paying more than you should.