As with anything else, insurance can be bought too cheaply. But your business isn’t “anything else” – it is your livelihood. You certainly don’t want to jeopardize that by being cheap, am I right?
We are raised to believe that cheap is good. Not that cheap is best, but simply that something which is cheap is also worth our money – at least to some degree. That is just not always the case though.
Imagine this scenario: Your company truck is torpedoed by some drunk driver, who has no insurance. On top of that, he escapes the scene never to be seen again. Who has to pay for repairs to the truck?
Right: You do. Unfortunately you picked the wrong commercial truck insurance. Wrong product – wrong company; they refuse to compensate you in any way. No matter how much you plead, beg or threaten them, they just give you legal gobbledygok in return. Nothing happens month after month. In the worst case, you can’t afford to repair the truck out of your own pocket, which means you can’t use the truck. Voila! You are effectively out of business. Or maybe you can afford the repair to keep your business on wheels, but you still have an insurance company to fight – a company that has proven itself untrustworthy, giving you no choice but to get a commercial insurance quote from somewhere else.
Sounds terrible, doesn’t it? The worst part is it could have been avoided with a little cleverness. Commercial insurance coverage can be expensive, especially if your business is new and hardly earning money yet – but please don’t do yourself a disservice by being too cheap. There are many types of commercial insurance available and some can be very expensive. It all depends on your field of work. Something like malpractice insurance (needed by doctors and other medical personnel) is perhaps one of the most expensive forms of insurance there is – but malpractice lawsuits can be monstrous in size and can completely ruin the business of a doctor, unless he is properly insured. Please understand then, that having NO insurance is not the solution. Logically, having too cheap insurance can be exactly like having no insurance, so spend the money. You can’t afford not to.
Don’t think in terms of “cheap” commercial insurance, but try to get the insurance you need at the right price instead. This means dealing with a commercial insurance company of good repute, as well as understanding your exact needs – and making sure the insurance broker understands them too. It also means getting quotes from more than one company, but on similar products. If one is much more expensive than the others; then that one is probably overpriced. If one is much cheaper than the rest; then it is likely to be exactly that – too cheap.