7 Questions You Should Ask Yourself When Investing in SME Business Insurance

As time goes by, the business world becomes more competitive. If you’re investing in Small and Medium-sized Enterprises (SMEs), there’s no doubt that you may encounter risks along the way. This is why securing the right insurance is vital. However, with the wide range of insurance possibilities, it can be difficult to understand where to start.

Fortunately, nowadays, you can easily find an insurance adviser. So, if you’re looking for the right SME business insurance, they can help you find the most suitable for your business. But before that, here’s the list of things you should ask yourself before you start investing in SME business insurance.

1. What are the possible risks my business may encounter along the way?

The first thing you should do is identify the risks of your business. You can start with property damage, liability, and others you may encounter as you move forward. If it’s a bit difficult to identify, you can begin by listing the nature of your business. If you provide services, you should also include the risks your clients, partners, and employees may encounter in your company. For there, work your way to the specifics to complete the list.

Once you have the list of risks, you can use it as a guide in making the right decisions moving forward.

2. What type of insurance coverage I should invest in?

There’s no such thing as one-size-fits-all when it comes to SME business insurance, or even in other types of insurance. This is why getting to know your specific needs should be prioritised. In doing so, you should consider factors such as the size of the company, risks, and other things you need to protect in the company.

Some of the most common types of business insurance include general liability, workers’ compensation, and commercial property insurance. These coverages are important so that you won’t have to pay a significant amount in case things don’t work the way you expect them to.

3. Is the coverage enough to cover the future needs of my company?

Comprehensive coverage should be the priority instead of affordability. If you avail of a specific SME business insurance just because it’s cheaper than the others, you might end up spending more money when the time comes you need it.

You can ask your insurance broker for the maximum amount they can pay in the event of a claim. Usually, this information is included in the policy, but you should be aware first before choosing the insurance.

There are instances when someone files a claim against you, but your insurance can’t cover the entire claim, so you still have to pay for the rest. So, make sure you’ll have enough coverage before signing up for any insurance policy.

4. Does the insurance policy include business interruption coverage?

When availing of SME business insurance, usually, there are default coverages. And one coverage you should ensure that’s included in the policy is the business interruption coverage. When worse comes to worst, you would still like to save your company. But if you don’t have the finances to take care of bills, salaries, loans, and other expenses, all your years of hard work may come to an end.

Fortunately, with business interruption coverage, you can file a claim that can cover all your financial needs until your business is back in the game.

5. What are the deductibles and premiums of the insurance policy?

Understanding basic insurance terms such as deductibles and premiums should be your priority. If you’re not aware of these terms, you may encounter problems in the future. For instance, if you’re not aware of the deductible deal you signed, you may still need to pay a huge amount of money before your claim kicks in. So, even if you’re hiring an insurance broker, you should know the basics of insurance. Of course, you can always ask them what these mean but it’s best to be prepared.

6. How reliable is the insurance provider?

The reputation of the insurance provider is also crucial. Since you’re investing in their services, you should be aware of their track record. Aside from asking your insurance broker about this, you should also look for online reviews and recommendations, so you can make an informed decision.

7. Are there exclusions and limitations in the policy?

It’s not just about the amount of claim. There are instances when an insurance policyholder isn’t aware that a specific event isn’t covered in the policy. When that happens, you won’t be able to claim anything at all, as your claim will just be denied.

So, take ample time to review the terms of the insurance policy before agreeing to anything. You can look for online reviews or ask people you know who also avail of the policy, and ask them how’s their experience so far.

Final Thoughts

Investing in SME business insurance comes with its share of uncertainties, but with the right provider and broker, you’ll have peace of mind.

We hope this article helps you decide on the business insurance you’re planning to invest in. If you would like to share your thoughts about this, don’t hesitate to leave a comment below!