When shopping for insurance, the better you know your business, the better consumer you will be. Keeping the following tips in mind will help you get the most appropriate coverage for your business at the best price.
Determine what insurance is required. You may be legally required to carry certain types of insurance, such as workers’ compensation if you hire employees. See Hiring Help. If your eBay business is carried on outside your home, your commercial lease may obligate you to carry a certain amount of property insurance. You will need proof of these types of coverage to get your business off the ground.
Assess and prioritize your true risks. Once you’ve dealt with required coverage, spend your money where you need it the most — protecting you and your business from the most probable risks. Wherever potential losses are greatest is where your insurance dollars should go. How much business property do you own? Do you make or sell products that may cause someone injury? Will you carry a large inventory of completed products or valuable raw materials? Will you have employees, and if so, how many? Your answers to questions like these will help you and your insurance professional figure out what your priorities should be and the type of coverage you really need.
Reduce your risk. Risk management will minimize your insurance claims and bring your premiums down. Depending on your business, there may be things you can do to reduce your likelihood of suffering a costly loss, or to transfer risk to others, either through insurance or by other means. The federal Small Business Administration offers a free primer on business risk and ways to transfer it, as well as a detailed checklist to help identify the coverage you need.
Consider higher deductibles. Increasing the deductible on a policy will result in lower premiums — a financial lifesaver for a business struggling to get off the ground. The downside, however, is that, in the event of a loss, you will have to pay more money out of pocket before the insurance company pays anything.
Ask your insurance pro about discounts. Many companies offer lower premiums or discounts to policyholders who take certain safety precautions. Find out whether any of these discounts are available through the companies you’re considering — then take the necessary steps to lower your insurance bills.
Don’t duplicate coverage. Carefully review all of your policies. For instance, your homeowners’ or renters’ insurance policy may or may not cover a few relatively inexpensive pieces of business equipment.
Consider a rider/endorsements to your existing policies. Home-based eBay businesses that have few business-related visitors can purchase a relatively inexpensive liability endorsement to a homeowners' policy. An endorsement may also be available to extend property coverage to business equipment. If you use your personal car for eBay business and your existing auto insurance policy doesn’t cover business use, you may be able to get the coverage you need through an endorsement. However, if you use a car solely for business, you will have to buy a separate business/commercial auto policy.
Always read the fine print. Before you write your premium check, make sure you understand exactly what you’re getting for your money. Insurance policies are notoriously difficult to read, so your insurance professional should help you with this. Know exactly what is covered and what is not (exclusions), and the limits of coverage. Many insurance companies place a limit on how much you can collect per item, per incident, per person, or per year—and may further break these limits down depending on what caused the loss, what type of property was damaged, or other factors.
Take the time to prepare for a claim. Make sure you can collect if necessary. If you need to submit an insurance claim, you will have to prove the extent of your loss. For property coverage, you should photograph your eBay business equipment and inventory and keep records of what you paid for it or other indicators of its value. If you buy and sell very valuable items, such as fine art or antiques, consider having them valued by an independent appraiser. Keep all such records in a different location, such as a safety deposit box.
Keep your coverage up to date. Most experts suggest reviewing your coverage annually. Have you or your business purchased property, grown substantially, gotten another vehicle, expanded into a different line of business? These are all factors to discuss with your insurance provider in investigating whether to increase your coverage or otherwise change your existing policies.