It makes very little difference where we are in the world today, the word ‘budget’ is pretty well understood by all – when it comes to insuring our homes, motor vehicles or commercial interests, budget insurance is fast becoming the way to go. The principal reason for this is that people in business for themselves appreciate that the only profits are in cheese-paring habits. This is where the less we spend the more our profit margin will be.
One of these cost-saving moves is to ‘invest’ in lower insurance premiums for the business that has been built on the sweat of one’s brow. Business insurance is a significant cost of actually doing business so, if you haven’t already considered this budget insurance aspect of cost-cutting, it is well worth investigating because anything from a few hundred dollars to thousands can be reduced from a business’s annual outgoings; budget insurance premiums are one method of achieving this.
There are several ways to approach the subject – here are five tips to make things easier:
* If you are contemplating starting (or have just started) your own business there is a great deal to consider in the start-up process; initially your business plan will include premises and the rent that goes with it, personnel, building insurance and a public liability indemnity. This ensures that if someone is injured, say, by tripping on a door mat the law suit they take out is against your insurers and not you personally.
* Your ideal initial budget insurance plan would include a cover for only around two to three years – no long-term cover. The reason for this is that commercial climates and conditions change quite often. You don’t want to be stuck in an insurance rut and be unable to change with the conditions as you see fit.
* Insure your most important assets first and most heavily. If your premises are leased, then insure them in the name of the landlord. It is no use covering them in your name when the property is actually owned by someone else!
* Take some time to check out various companies that specialise in the type of insurance you are seeking to cover your business. The best way to do this (because doing your own due diligence can be a time-consuming activity) is to engage an insurance broker – a real broker is one who obtains quotes on your behalf from a variety of insurance companies – including budget insurance companies. Ask to look at the comparisons with your broker; this will give you a much better insight into the workings of insurance and will help you to apply it to your own circumstances.
* Hand-in-hand with budget insurance must go what used to be commonly known as ‘Key Man insurance’. Possibly not politically correct, but the term ‘key man’ describes literally those most important members of your company who, if they were to be permanently disabled, or they died, would leave a gaping hole in your business. Such an event could even lead to the demise of your business and subsequently your livelihood.
Perhaps the most constructive point to remember for obtaining the correct budget insurance – in addition to shopping around – is that many people have found that the only time they’ve needed insurance…is when they didn’t have it.
By Andrew Clapton