You might buy auto insurance a dozen times throughout your life. But business insurance? Most of us will only have to go through that process maybe once or twice, if ever. So, don't be embarrassed by your beginner's mistakes. We're all beginners.
Here are some of the most common errors made by business insurance buyers:
- Failing to assess business assets properly. Consider the whole of your business assets. Company vehicles, physical property, intellectual property, servers and computers. You don't want to find out too late that something isn't covered because you didn't realize it was a business asset. If you use it for your business, see if you can get it insured.
- Failing to assess business risks properly. It's not just your actual property that you need to worry about. Every line of business brings with it a long list of risks, and it doesn't just come down to losing some inventory in a fire. You may need to look into libel and slander insurance, for instance. Or, if you run a restaurant, food spoilage insurance. Talk it through with your agent, and they can help you determine exactly what you need.
- Neglecting to study the policy. You're probably going to find a handful of surprising exclusions in any business insurance policy. You want to make sure that you're covered against everything that you want to be covered against. Don't make the mistake of assuming you're covered. Always read the fine print. Buy additional insurance wherever your primary policy is lacking.
- Selecting low deductibles. This seems like a good idea at first, but with low deductibles comes higher premiums. Consider that you might never have to pay a deductible, but you'll always have to pay your premiums monthly or annually. Higher deductibles means lower operating costs.
As you become more experienced in running your business, you can always renegotiate your insurance policy. So, don’t worry. One coverage mistake upfront is not going to sink you long-term.
Also Read: Never Make These Three Business Insurance Gambles