6 Insider Secrets: How Successful Entrepreneurs Choose Business Insurance
“…why would I need (them) to buy insurance. It’s better if they have to come to me to ask for more money”, said the venture capitalist to the underwriter.
The underwriter, was me…
You’ve probably never stared at a series of policy wordings for any particular reason.
I have.
For the uninitiated, it’s like standing at the edge of the open door on the aeroplane, knowing you need to jump, but not sure if your parachute will open (or if you asked your tandem-jump-instructor what “plan B" is exactly.
You’re not alone in this. Every business owner and entrepreneur, at some point, has felt that mix of aspiration and concern, that cocktail of “I’ve got this” and “What the heck am I doing?”
Choosing the right insurance can feel like navigating a minefield in the dark. One wrong step and BOOM! But here’s the thing: it doesn’t have to be that way.
Successful entrepreneurs, the ones I’ve worked with have walked this path before, and do things a bit differently. From minefield to dance floor. And you can too.
So, let’s step into their shoes. Ready to turn your concern into confidence?
Six things successful entrepreneurs do differently when choosing business insurance.
Turning Risk Assessment into a Strategic Advantage
Risk assessment. Sounds pretty dry, doesn’t it? But think of it like a treasure map. It’s a guide to the potential pitfalls and gold mines in your business landscape. Successful entrepreneurs don’t just glance at this map; they study it. They’re like explorers, looking beyond the obvious paths and considering less-travelled routes.
Take Sarah, for example. She runs a successful e-commerce business. While many would focus on the obvious risks like cyber threats, Sarah went a step further. She considered the risk of her key supplier going under and made sure her insurance covered this. It’s like she had a crystal ball when her supplier went bankrupt or was disrupted, but her business didn’t miss a beat.
For instance, a Suppliers Extension is not only useful for property insurance. The same idea can be used in liability policies by asking insurers to note the interest of specific suppliers or even customers.
Prioritizing Value Over Cost
Let’s face it, nobody likes parting with their hard-earned cash. But successful entrepreneurs know that skimping on insurance is like buying a parachute based on the lowest price. Not a comforting thought when you’re about to jump out of a plane, right?
They prioritize value over cost. It’s not about finding the cheapest policy; it’s about finding the one that offers the best protection. It’s like choosing a car. You wouldn’t pick the one with four seats, when there’s six in your family. The same goes for insurance.
For example, if you offer advice or services and buy business liability insurance, does it cover the costs you face from day one of a dispute? Or do you need to pay the costs upfront and only get these back once your insurer decides? There’s a significant difference that could impact your cashflow until a dispute is resolved.
Learn from Mistakes and Near Misses
Nobody’s perfect. We all make mistakes. But successful entrepreneurs don’t just learn from their mistakes; they turn them into opportunities. It’s like turning lemons into lemonade.
Take Mike, for instance. He owns a bustling cafe. When a small kitchen fire revealed his policy didn’t cover all his repair costs, he didn’t just fix his kitchen; he fixed his insurance. He turned a near miss into a chance to fortify his business, making it stronger than ever.
Remember, choosing business insurance isn’t just about protecting against the bad times; it’s about setting yourself up for the good times. It’s about building a business that survives and then thrives.
Was the near miss or loss you experienced within your control? Somewhat within your control? Outside of your control? Insurance is well placed to help with certain types of risks. Knowing what is right for your business will ensure you focus your insurance on the commons risks that you seem to be priorities and what insurers are able to insure.
For example, use an insurance broker. If you already use a broker, consider gaining a second opinion either through your existing broker or via another.
Master the Basics of Business Insurance
You won’t go past the knowledge and market savvy of a good broker.
However, imagine you’re building a house. You wouldn’t start without a solid foundation, right? The same goes for choosing business insurance.
Successful entrepreneurs know their ABCs — and by that, we mean Auto (Vehicle or Fleet), Business Interruption, and Commercial Property insurance. And let’s not forget our friend, Liability insurance. It’s like a safety net, ready to catch you if a customer slips and falls at your premises or if you’re hit with a lawsuit.
Successful entrepreneurs don’t just know these basics; they live them. They’re like chefs, knowing every ingredient that goes into their business protection recipe. And just like a chef wouldn’t forget the salt, they don’t overlook any essential coverage.
Try this approach. If you use a broker, disclose the information they request and no more. For example, you’ll be asked to complete application forms. Complete these fully. If questions aren’t applicable, then say so, “not applicable”.
Then, provide your own summary of your business that describes the vital elements of your business from your own perspective.
Build and Maintain Strong Relationships with Insurance Brokers (more than one)
You wouldn’t go on a road trip without a reliable GPS, would you? In the world of business insurance, brokers are that GPS. They guide you through the complex landscape, helping you avoid potholes and find the best route.
Successful entrepreneurs know the value of a good broker. They’re not just service providers; they’re partners. It’s like having a trusted mechanic who knows every inch of your car. They help you keep your business running smoothly, no matter what bumps you hit along the way.
Regularly Review and Update Insurance Policies
Businesses evolve. They grow, they change, they adapt. And just like you wouldn’t wear the same clothes you did ten years ago, successful entrepreneurs know their insurance needs to keep up.
Regular reviews are part of their strategy. It’s like a regular check-up with a doctor, making sure everything is in tip-top shape. They adjust their coverage as their business grows, ensuring they’re always protected, no matter how their business evolves.
Stepping into the Shoes of Success
You’ve made it this far, and that’s no small feat.
Remember, every successful entrepreneur has been right where you are now. They’ve felt that same mix of excitement and apprehension, that same pulse-pounding thrill of potential. And they’ve used that energy, and channeled it into making smart, informed decisions about their business insurance.
You’ve got the knowledge now, the insider secrets. You know the six things successful entrepreneurs do differently when choosing business insurance. And that’s proven to be powerful. It’s like you’ve been given a map to navigate that minefield, a guide to turning the unknown into the known.
Every step you take, every decision you make, brings you one step closer to joining the ranks of those successful entrepreneurs by de-risking your venture.
