The day you start a business is the day you need commercial insurance. There is more to purchasing commercial insurance than signing an application. By following a few Dos and Don'ts you can make sure you purchase and maintain the kind of insurance you need and can afford while minimizing business risks and losses.

THE DO's

DO find an insurance agent who has some experience with your type of business.

DO shop around for the best price and ask for written coverage recommendations from various agents -- they should be happy to provide you with one for no cost.

DO take notes while you are taking to various agents.

DO check on insurer solvency before purchasing a policy. The following publications rate insurance companies for financial solvency:

Best's Insurance Reports
Moody's Bank & Financial Manual
Duff & Phelps
Standard & Poor's

DO read any proposed policy carefully.

DO buy a policy that will cover the replacement cost of the property. Actual current value coverage could leave you with a significant lack of funds when you have to replace your damaged property.

DO consider purchasing "Building Ordinance Coverage" if you do business in an older building. When rebuilding you will most likely have to upgrade to comply with various building codes and ordinances that didn't exist when the building was constructed.

DO consider purchasing a renter's commercial policy if you lease your business space, even if your lease doesn't require it. The owner's policy probably doesn't cover damages resulting from the negligence of your employees.

If you are renting, DO make sure that there is a mutual waiver-of-subrogation clause in your lease. This should keep the landlord's insurance company from suing you to recover the money it has paid to the landlord.

DO confirm that your independent contractors carry their own workers' compensation and liability insurance for their own employees. If they get injured they may be considered your employee, and if they injure one of your customers, your policy may not cover it.