If you've ever stood in the cold remedies section of a drugstore or grocery store, perplexed by the sheer number of choices, you have taste of what it's like to shop for business insurance. In an attempt to be all things to all people, the insurance industry has created a seemingly limitless variety of insurance offerings, most of which you don't want or don't need.

But you must have decided that you want something, or you wouldn't have chosen to read this article. How do you make intelligent business decisions when it comes to insurance coverage for your business and your employees? It's no small task, but with some careful thought and the suggestions offered here, you can intelligently weigh the options.

The first part of this article is intended for readers shopping for insurance as employee benefits. If you're more interested in purchasing insuring for your business, skip to “Insuring your business.”

Call an Expert

If you're an employer or business owner, you probably have more urgent, value-add activities than researching insurance. If you do, it makes good business sense to call a Professional Employer Organization (PEO), such as Workforce Solutions, to discuss your insurance needs. A PEO provides all the services you would expect an internal Human Resources department to provide, including benefits administration, but it is a separate entity from the organization to which it delivers these services. PEOs deliver expert and efficient employee-related administration, sharing the responsibility and risk of managing workers. They can assess the insurance needs of your employees and shop for a package that meets them and that you can afford.

Know What You're Looking For

Before you can accurately determine the cost of insurance, and before insurers' quotes will be meaningful for you, you need to determine the kind of coverage you need. And that means knowing something more about your employees than you might already know. What kinds of insurance do they need and what do they already have? What coverage will be most important to them ten to twenty years in the future?

While this type of information may not be readily available—and it may be illegal for you to ask questions that would help—you can discern a great deal about your employees' insurance needs merely from demographic information. Older employees are more likely to need long-term disability insurance or health plans with greater lifetime maximum benefits. Younger workers will be more concerned about family coverage and manageable co-payments and deductibles than about their long-term needs. Similarly, life insurance appeals more to workers over the age of 35 than to employees just entering the workforce.

If your business is in a large urban area where most employees use public transportation, group discounts on auto insurance will be less attractive than they would be in rural or suburban settings where most employees drive to work.

Your insurance benefits package can't be tailored to meet all the needs of every employee, but you can learn in broad terms what types of insurance hold the broadest appeal to your workforce.

Insuring your Business

As with the employee benefits side of insurance you have a sometimes bewildering array of choices when it comes to deciding whether and how to insure your business. However, at least one part of that question—whether to insure—should be fairly easy to answer. Insurance is a basic risk mitigation tool. Simply stated, insurance another entity's promise, in exchange for your payment, to step in and support you financially if certain risks become reality. To decide whether you need insurance, simply determine the risks to which your business is subject, assess what it would cost if the risks were realized, then ask yourself if you have the resources on hand to cover those costs. If you do not, you need insurance.

Common risks for which business insurance is sought include:

• Legal liability

• Loss of property due to theft, fire, or acts of nature

• Loss of life of key decision makers

• Loss from business interruption

• Automobile insurance for company vehicles

Choosing appropriate and cost-effective insurance is not as simple, as determining that you need it, but it helps to remember that all insurance is a guarantee of recovery in the event of loss. It is up to you to determine what property, persons, and/or security you cannot afford to lose or replace and insure accordingly.

Liability insurance is a typical example of insurance coverage for businesses. Most businesses incur some risk of litigation in the daily conduct of business. A liability insurance policy assumes some of that risk so that if a policyholder is sued while conducting business, the policy provides financial relief according to terms the insurer and insured have agreed upon.

What to Consider

With these fundamentals in mind, it should be clear what you need to think about in connection with your insurance coverage:

What assets should I protect from loss? Your business probably owns assets in the form of equipment or property that are required for your business to function. These are the assets you should protect with insurance.

What types of loss should I insure against? The nature of your business and your geographical location will introduce business-specific risks, and your insurance provider can help you determine what those are. In addition, remember that no business is immune to loss from fire or theft, no matter the location or industry.

Many small businesses are relatively low-risk ventures; they operate office equipment in a stable environment and do not have exceptionally valuable property that requires coverage. Because these businesses are so common, insurance carriers have created a package of standard coverage that usually meets the needs of these organizations. Called a BOP, or Business Owner's Policy, the package typically covers property and liability as well as loss due to theft or vandalism. You can most likely also add other types of coverage based on your specific business needs. If you're shopping for insurance for your business, ask your agents about BOPs. It will probably save you a great deal of legwork.

Choosing an Insurer

Allstate has good advice in this regard. It suggests that you search for a company willing to work with you individually to:

• Review your current coverage

• Identify gaps in your business insurance and where your firm could be at risk

• Understand your options, as well as their insurance products and services

• Protect your business or, if disaster does strike, help you through the claims process

This is sound advice. Also remember that a PEO like Workforce Solutions can do all of the heavy lifting for you. Their staff has the insurance expertise you or your business might lack and work with large numbers of insurance providers to help get the coverage you need at a reasonable price. If you choose not to work with a PEO, you can get a lot of help from a high-quality agent or broker. She can help you assess your insurance needs and will shop for the best coverage.