Buying the right type and amount of insurance is absolutely critical to the success and longevity of any business. As a business owner, you don’t want to discover that you don’t have adequate coverage when you need it. Here are some common insurance mistakes made by small business owners:
Being focused only on the lowest possible premium. With all the costs involved in running a business, there’s always the temptation to purchase the lowest possible level of coverage to keep the cost of insurance premiums under control. But that’s not always a wise move financially and can leave any business vulnerable in the event of a disaster. Generally, the lower your premiums, the higher your deductible and other out-of-pocket expenses after a claim. Make sure you have adequate coverage, and can afford to pay your deductible, plus your part of the financial cost, in the event of a disaster.
Failing to adapt your coverage as your business grows. 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 a new business territory. Your rates may go up or down, depending on the situation. Always provide your insurance company with the most up-to-date information about your business so that in the event something goes wrong, you’re covered.
Neglecting to manage all of your risks: Make the time to visit with us to review your unique personal and business risks and to learn the most cost-effective way to mitigate them. There are types of coverages 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? What if your facility is broken into or a customer or an employee is injured on-site? The right coverages can save you from going out of business in the event of a lawsuit or unexpected event.
Not having enough liability coverage. In today’s litigious world, you’ll want to make sure you have enough liability coverage in the event of a lawsuit or legal action. Property coverage is important, but liability coverage is as well. Liability insurance takes many forms, and we can help you determine which type and amount is right for you and your budget.
Not reading your policy information. Read all information about your policy, including any updates, so you completely understand your coverages. Ask questions if you don’t understand anything you read.