Common Insurance mistakes to make
Although most business owners are familiar with the importance of having insurance, they still make mistakes that end up costing them a lot of money. The easiest way to avoid liability and probable financial loss is by securing your business against unforeseeable circumstance.
It exposes you to the danger of losing all what you have built over the years. So, here are just some 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 maximize 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 because most businesses fail to capture the 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.
Leaving essential information can lead to under insurance, which can bring some misunderstanding when demanding compensation.
Failure to read the terms and conditions
Reading through the terms and conditions is something that most people take for granted.
All we do is listen to the insurance advisor, ask a few questions and sign the papers. However, this can be detrimental if there are clauses within the insurance policy that you don’t agree with.
Some businesses come to realise flaws in the insurance policy when it is too late. Ensure you read through the entire terms and conditions section to know what you are required to comply with as a policyholder.
Not having an interruption insurance policy
Small businesses can suffer great losses in the event of an accident, especially if it takes longer than expected to resume normal operations.
This greatly affects start-ups 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 to understand 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. Discuss with your insurance agent on an annual basis to review all the changes.