Business insurance: How to choose the best in 2022
If you have a business, you know the importance of protecting that equity. After all, no business is safe from unforeseen events that, in addition to emotional distress, can cause an unexpected financial breakdown. And it is precisely to minimize this type of damage that business insurance exists.
Business insurance protects your company, guaranteeing indemnity in case of damages caused by damage to the structure, machinery, furniture, goods and raw materials.
So important is it that, depending on what happened, business insurance can even prevent the closing of your business. But, to choose the best business insurance, you need to be aware of some factors that influence the coverage and the price you will pay.
First, the most important
- Business insurance protects your company in case of fire, theft, windstorm, electrical damage, among other occurrences.
- Insurance does not prevent problems from happening, but the insurance company will offer you financial support to minimize the negative effects.
- Attention is needed before signing the business insurance contract.
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Hiring Guide: Everything you need to know about business insurance
Having a business requires dedication and planning. After all, it is necessary to guard against unforeseen events, whether financial or material. In this scenario, it is essential that the entrepreneur has insurance support. And one of the most important and functional is, certainly, business insurance.
Imagine the following situation: A fire occurs in your company and all equipment is lost, and the structure of the place is doomed. How do you go about rebuilding your business without spending everything you have, borrowing or even without having to declare bankruptcy? Business insurance is the best way out.
Business insurance exists to quickly recover damages that may occur, from minor adjustments to more serious accidents. In this Hiring Guide we will explain how this type of insurance works and how to hire it.
What is business insurance?
Heavy rain can cause a factory to unhitch; lightning or even a failure in some security system can cause fires. These are just a few examples of unforeseen events that can occur anywhere.
But when they occur in a company the financial loss can be very high. That’s because, in addition to the fact that you need money to repair the damage quickly, you’re likely to have to stop the company’s service for a while.
In extreme cases, a situation like this can even lead to the closure of your business. It is then that business insurance becomes fundamental.
In the example above, if the company had this type of insurance, all repairs would be done faster and without you having to pay a lot of money or even get into debt.
Also known as property insurance, business insurance guarantees the quick recovery of damaged goods and structures in your business, according to what was foreseen in the contract signed.
So much so that, today, there are business insurance plans for all types of companies, regardless of size or segment.
Business insurance: How does it work?
Business insurance works in the same way as other types of insurance. That is, if there is any damage provided for in the contract, you will be compensated so that you can resolve the problem quickly.
To do this, you first need to choose an insurance company and then assess which plan is best according to the type of your company.
Insurance companies offer plans that differ according to the type and amount of coverage, ranging from basic to additional.
The scope of coverage and the term of business insurance will vary according to your needs, with the size of the company and the segment in which it operates. Thus, when closing the contract, you will pay monthly installments based on the total amount of insurance.
What are business insurance coverage?
The most common business insurances are those that only indemnify damages to the building or property inside the company due to fires, lightning, explosions or electrical outages. These are, even, the basic coverages present in all business insurance.
Natural disasters, such as a hailstorm, for example, can also be covered by a policy, as well as crimes and vandalism against the company’s assets.
The fact is that the types of coverage of business insurance policies are very flexible, and may be adequate according to the needs of the company and in accordance with the commercial activity performed.
An important tip to adjust when choosing the coverages of the business insurance policy is to know the potential risks for your business, according to the location where the company is, for example.
Therefore, Susep, the body that regulates and supervises insurers, allows insurers to offer additional coverage, in addition to assistance. Additional guarantees are therefore used to cover risk events that are not covered by basic coverage.
The most common are those that cover damage caused by flooding and flooding, theft of equipment and valuables, loss of profits, civil liability, among others.
To give you a broader idea of the most common types of coverage offered in business insurance, check out the table below that we have prepared for you.
Remembering that additional coverage may vary according to the plan chosen and offered by the insurer.
Business insurance: What is liability coverage?
It is very common that, among the additional coverages of business insurance is what is called civil liability.
Civil liability insurance protects against risks of bodily or material damage caused to third parties, which are your responsibility, provided they are involuntary.
That is, with this additional coverage, in the event of an accident in your business insurance, you are guaranteed reimbursement by the insurer, in case you are civilly liable for bodily or material damages caused to third parties during the term of the insurance.
Another example of civil liability is the payment of severance pay to employees who were injured during work.
What does not cover business insurance coverage?
Before signing your business insurance contract, you need to know what coverages are included, but it is also essential to know what is not covered.
It may seem obvious, but the fact is that entrepreneurs often take out insurance and, only when a problem occurs, will they realize that such a risk was not covered by property insurance.
Did you know that some items are not covered by business insurance?
Jewels, precious metals, works of art and rarities that, in general, are not directly linked to the company’s activity do not enter into business insurance.
In addition, in general, indemnities for land vehicles, vessels and air do not also cover business insurance.
The insurance also does not cover natural wear and tear that can occur with the company’s equipment, for example.
How much does it cost and where to hire business insurance?
The price of business insurance will depend on the coverages you choose to add to the plan. But factors such as the risk of the activity performed by the company can also influence the value of the insurance.
The cost of business insurance varies between R $ 500 and R $ 2 thousand per year.
Even so, it is possible to say that, in general, the cost of business insurance varies between R $ 500 and R $ 2 thousand per year. The cheapest covers low-risk establishments, such as offices. Average prices are for insurance that will cover risks of stores and restaurants. For industries, the values are higher.
That’s because insurers estimate the value of business insurance based on your company’s equity. To hire, simply contact the insurance company website.
Are there ways to minimize the price of insurance?
There are some actions you can take to minimize the final amount you will pay to have business insurance. To do this, however, you will need to invest money to make your business location safer from potential problems.
Experts point out that you can, for example, make minor adjustments to the building of your enterprise, in order to reduce the chances of fires or electrical outages. With that, it is possible to decrease the value of property insurance.
When the business insurance proposal is accepted, you will receive the policy documentation, which specifies the details of the contract, including the scope of coverage, exclusions and conditions.
Another option is to install lightning rods in the building where your company is located to avoid lightning. You can also increase the security of the workplace, with better access by employees or with more surveillance, to prevent theft and vandalism on the property.
It is also worth mentioning that these and other measures are also fundamental because before business insurance is signed, some insurers carry out inspections on the premises precisely to assess the risks.
Hiring Criteria: How to analyze types of business insurance
So far, you have seen that before choosing the best business insurance it is essential that you carefully read the policy before signing it. With this, you can be sure of what is and what is not included in the contract.
But, when choosing between so many plans offered by different insurers, you also need to pay attention to other factors. Are they:
- Type of Company
- Relative risk X Absolute risk
- Deadlines and installments
In the following, we’ll show you how you can analyze each of these criteria before taking out business insurance.
Type of Company
The first factor you should consider when evaluating available business insurance is the type of company you have and the activity it carries out.
This is because, as we have seen, the coverage and values of business insurance are stipulated according to the characteristics of your business.
In addition, it is important to note that each business sector requires a specific type of protection, some even mandatory. Therefore, the first step is to find out which coverage cannot be left out of your insurance.
Then, you must assess which is the best insurer. To ensure that the insurer provides an efficient and quality service, verify that it has a record with the Federal Government’s Private Insurance Superintendence (SUSEP).
In the case of business insurance, it is also recommended to choose an insurance company that offers other types of protection, such as life insurance and health insurance for employees.
Relative risk X Absolute risk
Another factor that you should watch out for when taking out business insurance is whether the policy refers to relative risk or absolute risk.
With relative risk insurance, if the loss amount is equal to or less than the contracted, the indemnity will be paid within the limit value established. However, if the amount exceeds the contracted amount, the indemnity will be apportioned, with the participation of the insured.
To ensure that all losses will be compensated, the best option is absolute risk business insurance, in which there is no apportionment.
Therefore, you must be aware of what you are actually hiring, to know which damages are indemnifiable or not in case of any unforeseen occurrence with your company.
As we have seen, there are numerous types of business insurance coverage and each insurer offers different combinations through plans. Some insurers also allow you to customize your plan, including and / or excluding coverage and assistance.
To choose the ideal plan it is essential that you know the risks to which your company is subject.
The experts also reinforce that, if possible, the ideal is that you choose a plan that contains additional coverage related to the functioning of your business.
Deadlines and installments
Finally, we recommend that you take into account the terms of term of the business insurance, as well as the amount and value of the installments that you will have to pay.
The longer the term of business insurance, the better for you and your company. And at this point, it is worth noting that most insurers offer attractive discounts for those who decide to renew the term of business insurance.
In addition, it is essential to ensure that the value of the installments fits in your pocket and does not compromise your budget too much.
Business insurance is one of the most important insurances for business owners. With it, you pay a monthly fee and guarantee that you will be compensated in the event of problems that can cause unexpected losses to your business.
And, although there are mandatory coverages in business insurance, such as those covering risks against fire and explosion, it is necessary to pay attention to additional coverages and those that are not included.
Therefore, before closing the contract, carefully read the policy and always choose an insured company that is regulated by Susep and has a good reputation among consumers.
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