Buying the right type and amount of insurance is crucial to the success and longevity of your business. You don’t want to find out that you don’t have the right insurance — or any coverage at all — to cover you when you need it. Here are three common insurance mistakes made by small business owners — and what to do instead:
Opting only for the lowest possible premium. D’oh! Some businesses purchase the lowest possible level of coverage to keep their insurance premiums down. But that’s not always a wise move financially and can leave them vulnerable in the event of disaster. Generally, the lower your premiums, the higher your deductible and other out-of-pocket expenses after a claim. Make sure you can afford to pay your deductible, plus your part of the financial cost, in the event of a disaster.
Failing to update your insurance company. It’s always a good idea to notify your insurance company about changes to your business. This may include hiring additional employees, purchasing new equipment or entering into new business territory. Your rates may go up or down, depending on the situation. Either way, you’ll want to be adequately covered.
Neglecting to manage all of your risks: Make the time to visit with us to review your unique personal and business risks and the most cost-effective way to mitigate them. There are types of coverage that business owners often forgo — and then wish they hadn’t. For example, if you become disabled, could your business survive without you for three months? What about six months or even a year? What if you are sued by a customer or client? The right coverages can save you from going out of business in the event of a lawsuit or unexpected event.
