Buying Business Insurance: What to Consider and Pitfalls to Avoid: Nearly 75% of all small businesses are underinsured. When something happens to your business that’s out of your control, insurance should be there to help you recover.
Without the right insurance coverage in place, you’re on your own. That is devastating to a small business, and it’s enough to force many to shut down after a disaster.
You need to make sure that you purchase the right business insurances policies that suit your business. Read on to learn the major pitfalls to avoid when buying small business insurances.
1. Assume General Liability Covers Everything
Did you know that there are dozens of different insurance policies that may apply to your business? Many assume that they have total coverage with a general policy. That only covers a few instances, such as a customer tripping on a wire and injuring themselves.
General liability doesn’t cover company vehicles, cyberattacks, and natural disasters. You need to get separate policies, but you can get a multi-policy discount from your insurance company.
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2. Rely On Homeowner’s Insurance for Home-Based Business
Home-based businesses make a similar mistake. Since they work from home, they think they’re covered by their homeowner’s policy.
If something were to happen to your home, your inventory and business equipment wouldn’t be covered. You should have a rider attached to your current policy or have a separate business policy.
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3. Don’t Insure Income Losses
Businesses learned why you have to have business interruption insurance over the last year. COVID-19 forced many to completely shut down for months.
There was no way for these businesses to generate income. Business interruption insurance covers you if you can’t operate because of physical damages. Insurance companies fought COVID-19 claims, but small businesses are winning in court.
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4. Only Shop With One Insurance Company
You want to have small business-insurance that covers your business at the right price. You could shop at various providers yourself, or work with an independent insurance agency.
Independent insurance agencies work with several insurance companies. They can help you compare coverage, deductibles, and premiums.
You might find that it saves time over gathering insurance quotes yourself.
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5. Don’t Adjust Your Policy
Your business changes quite a bit each year. Your insurance policies need to evolve with your business. Anytime you make a major change in your business, you should check with your insurance company to see if you need to update your policies.
You should do a thorough review with your insurance rep every year.
What changes should you look out for? New business locations, new equipment, and new employees. If you’re offering services online, you want to make sure that you have adequate coverage.
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Avoid These Business Insurance Mistakes
Did you learn anything surprising about business insurances?
Don’t worry about the business insurances cost. Remember that underinsurance costs a lot more if something happens. Don’t make these small business insurance mistakes and you’ll always have the right coverage.
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