Common insurance mistakes to avoid for your small business
The easiest way to avoid liability and probable financial loss is by securing your business against unforeseeable circumstances. Failure to do so jeopardises the chance of your venture’s success. It also exposes you to the danger of losing all that you have built over the years.
Although most business owners are familiar with the importance of having insurance policies, they still make mistakes that end up costing them a lot of money. So here are just a few of the more common mistakes you need to avoid when arranging your business insurance.
Judging insurance policies based on the price
Since the sole aim of every business is to cut down expenses and maximise profits, most people find cheap insurance policies very enticing. As much as price is a concern, it is vital that you research on the efficiency of the insurance company first. For instance, check their security rating, how effective their claim service is, and how prompt they are in reimbursing. Checking through online reviews can be a good starting point in your research.
Poor business description
This problem mainly occurs with online insurance quotes because most businesses fail to capture the exact value of what they want to insure. It’s good to ensure that your description captures all the business property and activities as required by the insurance company. Omitting essential information can lead to under insurance, which can bring some misunderstanding when demanding compensation.
Not having an interruption insurance policy
Small businesses can suffer great losses in the event of an accident, especially if it takes longer to go back to the normal operations. This greatly affects startups that are struggling to break even. Even though the insurance can replace the lost property through a normal policy, the time lost is significant to the venture. Taking an interruption policy will cover the income lost when the business is closed for renovation or other activities.
Paying for policies that the business can do without
Insurance companies are determined to talk you into insuring everything, sometimes things that are not necessary. You need a genuine insurance broker who will advise you on what is necessary for your small business. Do not let insurance policies eat all your profits because you will end up making nothing. Seek the assistance of reliable brokers such as The Insurance Octopus to know what is worth insuring.
Not reviewing your business insurance
A regular review of your business insurance helps you to make the right adjustments as your business grows. For instance, if you have moved your business to a new location or acquired some new assets, it’s essential to capture all the changes. Meet with your insurance agent on an annual basis to review all the changes.
Improve your small business by avoiding these insurance mistakes.
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