April 14, 2021

Common insurance mistakes to avoid for your small business

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Common insurance mistakes to avoid for your small business

The easiest way to avoid liability and probable financial loss is to secure your business against unforeseeable circumstances. Failure to do so jeopardizes the chance of your venture’s success and exposes you to the danger of losing all 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 some of the more common mistakes you need to avoid when arranging your business insurance.  

Failure to read the terms and conditions

Reading through the terms and conditions is something that most people often neglect. All we do is listen to the sales pitch of the insurance marketer, ask a few questions and sign the papers. However, this can be detrimental if there are clauses within the insurance policy you don’t agree with. Some businesses come to realize 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.  

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 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 your description captures all the business property and activities as required by the insurance company. Leaving out essential information can lead to under insurance, which can bring about 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 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. 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, including things that are not always 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; 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 your situation.     Improve your small business by avoiding these insurance mistakes.

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Contact our Head of Commercial Insurances, David Baker, today to discuss your business’s insurance requirements.

T: 01245 449060

E: david.baker@ascendbroking.co.uk