Keep insurance coverage current

A great investment in your small business would be good insurance coverage. The right policy will protect everything you”™ve done to make your business successful. However, the policy you bought when you were starting out might not be sufficient for your current needs or the direction your company is heading. Review your coverage periodically to ensure you”™re getting the most out of your monthly payments and you”™re prepared for all valid risks.

Start with a full assessment of your insurance needs. Business insurance safeguards your property against the consequences of fire, theft, liability and other common risks. As your business has grown, however, you may have added new services and specialized equipment that require policy endorsements or modifications.

Disaster and business interruption insurance is also becoming a must for business owners concerned about damage or a prolonged shutdown resulting from natural disasters, incidents such as a toxic spill or transportation disruption, or acts of terrorism. Though such events may be rare where your business is located, even a relatively minor event could disrupt your operations and the surrounding economy for several weeks.

Before buying a policy or increasing your insurance coverage, consider all the possible ways of holding down costs. Cover the most risky and largest perils first, then work down your list of priorities. Don”™t buy coverage you don”™t need but also don”™t overlook seemingly minor risks simply for the sake of saving money. If the probability is small, the premium will be too. Use a deductible as high as you feel your cash flow and savings will allow.

Making wise insurance decisions is easier when you work with a reputable and qualified broker agent or consultant. A search feature at www.iiaa.org, the site of the Independent Insurance Agents of America, will help you find qualified professionals in your community.

Note that many small-business policies offer the option of adding riders as opposed to buying separate policies. That”™s why buying all of your coverage from a single agency or broker will help reduce costs. If multiple policies are necessary, make sure they cover separate risks. Otherwise, you”™ll be making unnecessary payments for what is essentially the same coverage.

Ross Weale is an assistant director with SCORE. Reach him at rweale@optonline.net. SCORE is a nonprofit whose volunteers provide free counseling and training to small-business owners. Call 1-800-634-0245 or visit www.score.org.