READ: 4 Minutes
Small businesses face many obstacles to success, but one of their biggest challenges is securing the proper insurance coverage. Getting the right insurance determines whether you’ll be celebrating an anniversary at the end of the year or counting losses and closing down shop. The right small business insurance policy can help cover you from expensive damages and lawsuits from various factors, including accidents, natural disasters, data breaches, professional errors, and workers’ compensation claims. But you might need to have various types of insurance covers to cover your business fully against several factors, depending on your industry.
1. Not Having Enough Coverage
It is important to at least have a general liability insurance policy to cover and protect you and the business from the costs that come with bodily injuries, property damage, accidents within your premises, or at the customer’s caused by a defective product. It will cost you an average of $500 per year for your small business.
You can also acquire business property insurance and business income insurance to cover all the aspects of your small business.
2. Basing Purchase Decision on Price
Small business owners make the mistake of looking at how much an insurance policy will cost them and not what it’ll cover in the event of an accident or injury. Don’t see a business insurance policy as another expense on your long list of expenses. The amount you’ll pay for your cover depends on your business type –whether high-risk or low-risk.
3. Failing to Update Insurance When Business Changes
Business and their needs keep changing all the time. Consequently, insurance needs to change as your business changes. Get in touch with your agent to help recalibrate your policy(s) to match your current business needs.
4. Neglecting to Include Cyber Liability Protection
Currently, almost every business depends on or uses some solutions that require collecting, analyzing, and storing data in the cloud, making them vulnerable to cyberattacks. Small businesses tend to neglect the need for cyber liability policies to protect them from cyberwarfare and data breaches that compromise the business’ and its customers’ integrity.
5. Not Knowing the Details of Your Business Insurance Policy
You get yourself an agent who speaks jargon to you about insurance policies, and you just sign the documents without asking for further details about what a policy is all about. Get all the details, even the one you deem least significant. You can have your lawyer and broker around to save from cunning insurance agents and fishy policies.
6. Excluding Valuable Assets From the Policy
Some business owners omit expensive equipment and inventory from policies, afraid of the expense of covering them. That’s not right. Everything in your business needs to be included in the policy. The cost of the policy doesn’t match the risk of leaving these assets uninsured in case of an event.
7. Making an Error on the Application Form
Your small business’s insurance needs and considerations differ from those of an individual despite the number of employees and assets you have. It is important that you list everything in the application form to avoid issues and complications when seeking compensation. Don’t misclassify employees, over quote or under quote inventory, and other assets during application.
8. Renewing Policy Without a Review With Your Broker
Let your broker know when you want to renew your policy or switch to another insurance company so that he can help and advise you along the way. Since the broker represents you, he will save you from treacherous insurance companies and advise whether to switch or change the policy to match your needs.
Avoid Making These Small Business Insurance Mistakes
Small business insurance cover is significant in helping spread the risks and costs from bodily injuries and property damage. But small business owners make some mistakes that deny them the benefits of insurance policies. It is advisable to get a broker and lawyer to help you through the application process to ensure everything is alright.
Have questions? Want to know more?
Reach out! At IMA, we’re here to help safeguard your future!