Many things go into a business owner’s success, including intense labor, countless hours, lots of money, and attentiveness. Success isn’t overnight; therefore, it takes a lot of hard work and dedication to grow your business and generate a substantial profit.
Although most business owners grasp this concept pretty well, they often overlook a basic business component. Adequate and appropriate business insurance is necessary to secure the long-term viability of your business.
Business insurance will protect your business against losses, so make sure you invest wisely. However, buying business insurance can be difficult and confusing as you must consider numerous factors.
Not to forget, choosing the wrong policy can negatively impact the growth and success of your business. You can easily use some guidance to avoid some common yet potentially detrimental mistakes while buying business insurance.
In this article, we’ll discuss some common business insurance mistakes and how you can avoid them.
Business Insurance Mistakes to Avoid
1. Cheaper Isn’t Always Better
Of course, the goal of every business owner is to minimize your costs and increase your profits. However, when it comes to your insurance you should never compromise coverage just to save some money! We say this because opting for a cheaper insurance policy can often be more costly in the long run.
If you’re choosing to buy a policy based on how cheap the monthly premiums are then you may not have the coverage you need. So, it’s best to compare business insurance policies, preferably with the help of a trained insurance agent. These agents can help you gather quotes and offer you the best advice based on their expertise.
2. Don’t Assume What a Policy Covers
Each business insurance policy includes important information regarding your deductible, limits, exclusions, and reimbursement policies. Therefore, this makes it a sizeable document that’ll require some time to thoroughly read over.
Failing to take the time to read over the limits and exclusions can result in a claim possibly being rejected. For example, say you have water damage in your home and you file a claim with your insurer. If you aren’t aware of your coverage limits then you may be left paying for more of the repairs than expected.
So, make sure you take enough time to read over the entire policy. If you only roughly skim through the document, you might end up with an unwanted surprise when you need to file a claim.
If you’re unsure what your policy covers then clarify with your insurance agent. This way if you want to make changes or updates to your policy you can.
3. Don’t Forget Workers’ Compensation
If you run a business and have employees then you need workers’ compensation. This coverage will protect you in case an employee gets injured on the job and can be used to cover their medical bills or lost income.
Your workers are a valuable part of your team and their safety should be your top priority. Therefore, failing to have this coverage can leave you with costly fines and serious charges. An incident like this could also tarnish your reputation and you may struggle to find people to come work for you.
Also, in most states, it’s required that you carry some sort of workers’ compensation coverage.
There are numerous mistakes that business owners should avoid when purchasing a business insurance policy. So, make sure you opt for workers’ compensation, read over your policy, and select a policy based on its coverage, not price.