Small Business Insurance

When it comes to the cost of small business insurance, the amount you pay will be informed by the exposure unique to your enterprise. Indeed the types of exposure may be similar in description from business to the next but the cost incurred by one business will be different from that in the other because the premiums are different. It is therefore prudent to thoroughly understand why these premiums differ for the different areas of exposure i.e. property, workers’ compensation, liability, time element, automobile and crime.

For property insurance premiums, the various factors that may be considered in determining the rate include building use and occupancy, structure construction, public protection, internal protection e.g. fire escapes and sprinklers, etc. In terms of liability insurance the premium cost is dependent on the business type. For example, manufacturing and hotel business’ premium costs are informed by gross sales while the premium costs for service and contracting businesses are informed by the payroll. Enterprises based on payroll or sales are auditable and it’s possible for such to end up in supplementary or return small business insurance premiums. In the case of companies there are deposit and minimum premium requirements to consider and these sometimes vary. Thus, when shopping around for small business insurance packages these requirements should be factored in accordingly.

Having identified a number of insurance companies that you can deal with, the first thing to do should be to make a background check on each company. Next, you should contact the relevant insurance authority in your area in order to ascertain the status of these companies and how long each of them has been operational there. Your search for the most suitable company to deal with may also require you to search for various review reports as published by various established and reputable rating services. Such reviews will offer detailed insights into the financial and rating positions for each firm on your list. The firm with the most attractive credentials should definitely be your preferred small business insurance provider of choice.

After contacting the insurance firm you have identified and having an agent take you through an assessment of your exposure, you will be in an informed position to purchase a small business insurance cover. If this is the case you will be required to complete some application forms and then pay an amount of money. Your agent should then present you with a ‘binder’ that bears his/her signature. This document will among other details identify you as the insured, show the date on which coverage becomes effective, identify the insurance firm, describe the location and nature of the property being insured, show the cost of the small business insurance cover, describe the liability limits, and any other necessary information. This binder can remain valid for up to 90 days before you are issued with the policy.

It is possible for an insurance cover thus issued to be cancelled by the issuing company. An insurance firm has a 60-day underwriting period within which it should review submitted applications and information, have an inspection carried out if required, and also make a verification of the premium calculation and rating. Your small business insurance cover may be withdrawn within this period but you must be issued with a cancellation notice of not less than ten (10) days. After the 60 days elapse the insurance company can only cancel your cover by giving you the reason for doing so and a 30-day notice. Insurance cover cancellation on account of fraud or premium payment can only be done after a 10-day notice is given. The non-renewal of your small business insurance cover by the concerned firm can only be done if you are given the reason(s) for the action and a notice period of not less than 60 days but not exceeding 120 days.