Buying a Business

Buying a business and buying insurance both involve risk and risk management. The more risk averse you are, the more you are likely to spend on better structures and insurance cover. When buying a business there are numerous threats; from fire to fraud, from damages to discontent customers. All these require a back-up plan called business insurance.

When buying Business Insurance for your new business:

Assess Your Risks.  Identify the potential hazards and threats for your business – an insurance broker may be able to help you here. It’s important to assess your own risks before you go shopping.

Shop Around. Try and find out who operates or specializes in your industry.  Some insurance brokers specialise in insuring specific types of business, while others can connect you with policies specific to your business activities. Often specialist brokers can get you the best coverage at the best rates.

Use a Reputable Broker or Agent. Commercial insurance brokers can help you find policies that match your business needs. Your Broker will receive a commission from the insurance companies when they sell a policy so it’s important you find a broker that is reputable and is interested in your needs as much as his own.

Assess Your Insurance Annually. As your business grows, so do your liabilities and assets. Don’t get caught underinsured should disaster strike. If you add equipment or expand your operations, you should contact your insurance broker to discuss potential changes in your business and insurance coverage.

Your business faces plenty of threats — from fire to fraud, from dishonest employees to discontented customers to disconnected utilities. And yet for nearly every peril, some insurance company somewhere is willing to underwrite protection. It’s about getting the balance right, as you can go broke keeping your company secure.

Where To Buy It

Use and Agent or broker?  Agents usually work for one insurance company. A broker however is, by definition, independent. In practice, a good agent or broker is an impartial matchmaker, finding you the right insurance and the right price.

Use a specialist. Consider an agent or broker who specialises in your industry. Such a person is likely to better understand your industry’s needs and know what works best. There could be a tailored cover that may be more cost effective.

Talk to a person.  When searching online – make sure you can talk to a live agent/broker who can talk you through a policy before you buy it.

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