Great post on business insurance by Pablo Guerrero Santibañez, Expatriate Business Director, Caser Seguros.

“In Spain there are over 3.5 million businesses. 90% of them can be categorized as small business with less than 10 employees. As you probably could guess, almost 50% of the insured businesses in Spain are bars and restaurants, followed by grocery stores.

Each year, 10% of the total businesses in Spain are brand new start-ups. However, 8% of the total figure shut down. The reasons are many, but shutting down because you didn’t have the right insurance shouldn’t be the case.

Insuring a business is not a hard task if you count with an insurance professional on your side that can assess you about the best coverage that your business requires.

In Spain, almost 90% of the business insurance policies are distributed through agents and brokers. Business owners really need someone with day-to-day experience and knowledge in the field. We are talking about insuring in many cases, the source of income of a family.

A common error of inexperienced and sales-starving assessors is to recommend a policy based only in price. It’s what in Spain is called “Pan para hoy, y hambre para mañana”. It might look like a good deal now but it will cost you more than what you think in the future when an unexpected event occurs.

As a business owner you should know what can be covered by an insurance policy. It might sound obvious, but in many cases the surprise comes when you realize that the insurance company doesn’t cover it or to the extent that you assume it would.

So, previous to issuing a business insurance policy take the following aspects into consideration: coverage, premium, service, insurance professional and company.

Don’t forget how much it cost you to get what you have when you decide to get just basic coverage on a policy or include optional coverage that for sure won’t do more than to help you in the future. So, it’s important to speak to your insurance professional so you understand the minimum coverage that you should have. In this category we have business property coverage, which will protect your business assets. It will limit your liability and can cover different type of losses such as damage from fires, electrical surges, or can even include other services such as legal defense.

But don’t forget that each business is different than the rest. It’s important to analyze your present and future business needs so you can add optional coverage depending on what you want.

For example, what would happen if you were paralyzed for 4 months because of water damage in your business? Could you continue with a normal life? Not being covered for the unexpected can be devastating to your life and business.

In many cases, insurance companies will benefit cautious business owners by lowering their premium if they have security measures like alarms, smoke detectors, deadbolt locks, fire extinguishers, and others. Some of these measures are not expensive and will help you sleep well at night and might even save you up some money.

People assume that theft should be a basic coverage in business insurance, but in many companies it isn’t. It’s not a problem if you know about it and you contract it as an additional coverage. The problem occurs when you didn’t read or know about it. Other examples are water and glass damages.

In Spain water and glass damages cause the higher rate of claims to insurance companies. Theft, having less claims, accumulates the most expensive claims of all. So, if you are not covered for events like the ones mentioned you should reissue your policy in order to include them. You can and should update your policy at any time that your business suffers a change (new machinery,…). Including or excluding information will vary the premium but like in any other aspect of life, lying doesn’t help at all.

It’s not only important to check if you are covered but to understand the economical limits that some companies apply. For example, if you have some sort of machinery in your business and each costs over 50.000 euros, you should check if you have an economical limit in the coverage of machinery breakdown. Imagine that one machine breaks down and a new one costs you 60.000 euros. The sad part is that it can happen if you don’t know what you have contracted.

So at this point, you probably are starting to think where you can find the best policy in the market. Once again, don’t forget that usually cheap things are never good and good things are never cheap. The average premium for business insurance is 450 euros. This doesn’t mean that if you are paying 800 euros you are overpaying. Remember that each business is different and not all policies cover the same.

If protecting your business from risks is your priority: search for good, solid, and experienced insurance companies that probably will have highly qualified professionals that can guide you so you can make the best decision for you and your business. Also, act as you would do with other common things in life: ask your acquaintances, peers or members of associations that you might belong to.

Contracting the right business insurance could be one of the most important decisions in your life.”

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