Unpacking the Basics of Business Insurance – SmallBizDaily

New business formations were 27% higher in 2020 YOY, which means we have a budding class of first-time entrepreneurs ready to take on the challenges that come with starting a new business. For many in this “founding class”–especially the first timers who may have been laid off from full time work due to the pandemic–purchasing business insurance might be a completely new idea.

As notoriously complicated as the insurance space can be, having coverage is often critical to establishing the needed financial guardrails and well-being for your business. Not only does business insurance allow you to protect your own assets, clients, employees, and equipment, but it is often a requirement of certain jobs or from clients who want to ensure that, in the event of an accident, you will be able to cover your losses.

If you are in a line of business that requires insurance, the best initial step is to understand the various types of coverage options available.

The Three Common Types of Business Insurance

Gaining a basic understanding of these broader types of coverage should be enough to help you determine whether business insurance is appropriate for your company, and if it is, deciding on the most suitable option available. Depending on your line of profession, it may also be worth looking into the more specific types of coverage available, including commercial property, commercial auto, and workers’ compensation insurance, to determine the risks and ROI that come with each.

What to Look for When Purchasing Business Insurance

Running a business is a risky venture under normal circumstances. But as the economy continues to navigate the road to recovery, uncertainty is only higher, particularly for small business owners. With that in mind, it is all the more critical that when shopping for business insurance, you select a provider that will work with you and cater to your needs as a small business. Two non-negotiables to look for include flexibility and efficiency.

Typically, binding, annual policies are the standard option for the majority of businesses. But in the midst of a pandemic, making such long-term commitments is simply not practical. In order to ensure you are not overpaying, get into the practice of reassessing your insurance on a monthly basis to determine how much coverage you need, and find providers who are able to provide you with the flexible policy options that best suit those needs.

Just as you value cost when you’re considering insurance providers, assess their efficiency as well. Go the extra step in evaluating their speed and technological capabilities so you are not at risk of waiting hours to speak with a representative, reviewing pages of terms and conditions, all just to receive a quote. Dig into their customer reviews and the provider’s NPS score to see how people are responding and how conveniently they were able to vet and secure coverage.

Ultimately, you want to be able to find an insurer you can trust, a provider who will work to support your business’s needs in a changing and high risk environment. Amidst this increasingly dynamic business landscape, it is essential for your insurance provider to understand the flexibility and protection necessary to start and sustain a successful business during these challenging times.

Jay Bregman is the CEO & co-founder, Thimble, insurance that helps small businesses succeed on their own terms, and provides policies designed for the uncertainty of starting and growing a business. Thimble has sold over 175,000 policies to small businesses across America via its award-winning app, partner APIs, and broker tools, and has raised $30M from investors including IAC (NASDAQ: IAC). Twitter