I haven’t made the jump yet, but it’s something I’ve been considering for a long time. These days I work for a bank and one of the major advantages is the insurance coverage that we are provided. It’s a bit more costly and complex than it used to be but it remains a very valuable advantage. I am planning on eventually moving to work on my business full time and while it’s not the reason I have not done it yet, you can be sure that the idea of having to buy and pay for my own insurance is a major source of concern.
Entrepreneurs often have the temptation to cut “useless costs” and while we all know that insurance is not useless, it certainly sometimes feel like throwing money out of the window. I’d caution you to think twice before doing it. As an entrepreneur, you are more vulnerable to problems and it’s your responsibility to make sure you are covered if things go wrong.
How I Plan To Do It
There’s no doubt that I won’t be getting that top of the line insurance from the moment that I go work for my business full time. What I will do however is get some basic insurance coverage and re-evaluate every year or so to make sure that what I own is sufficient. What would I get? It depends on many things but I think the following can be looked at:
–Health Insurance: I know it’s incredibly expensive but it’s not a luxury to have it. If you can’t afford it, take the most basic coverage and try to improve it over the years. It becomes too tempting to always postpone such coverage until it ends up being too late.
–Disability Insurance: More than in any other job, you are likely to suffer greatly if you are unable to work at some point. I would probably say that health insurance and disability insurance are the two that any entrepreneur should have at all costs. This will ensure that you’d receive some compensation if you were unable to go to work for a few, months or even longer.
–General Liability Strategy: Almost every business should also likely have some protection against damages done by your company to third party persons or property.
–Critical Illness & Life Insurance : This type of insurance could make sense but it probably depends quite a bit on your personal situation. If your entire net worth is tied to the value of your company and that you expect its value to increase quite a bit over the medium to long term, you might want to get some insurance to help your dependants if something were to happen in the meantime.
–Home/Office Protection: If you have an office, you probably should consider having insurance to cover damages that could occur. It might even make sense to get an umbrella insurance policy to get more complete protection from unlikely but extreme events.
Getting Good Rates
I would personally shop very carefully for those, ideally by talking to other business owners and often groups of entrepreneurs can be of great help to get a bit more info and also such groups are often able to get better deals by negotiating for others as well.
Have you had any experience shopping for insurance for your company? If so, I’d love to hear more about it!