Regardless of whether you are a new entrepreneur or running a long an established company, you probably have a myriad of responsibilities as a business owner. Among the most essential and key responsibilities in your company is to ensure you have adequate and appropriate small business insurance.
Just like many small business owners, you may be an expert in your industry but you may know little about insurance. To buy the right coverage you’ll indeed require some skills and if you aren’t keen, mistakes can be made. Of course, some errors might be minor but others can have serious impacts in your business. As a result, here are some pitfalls to avoid when buying small business insurance.
Buying Too Little Property Insurance
If you’re insuring your buildings and personal property under a commercial property policy, you should ensure you have adequate limits. This is essential even if your policy includes replacement cost coverage. While the latter will automatically cover the cost to repair or replace your damaged property, it won’t pay more than the limit of insurance.
Be sure to watch out for coinsurance clauses and agreed value provisions, which are often found in property policies and both of these impose a penalty for underinsuring your property. If in case a loss occurs and you failed to maintain a minimum amount of insurance, your insurer will not pay the full amount of the loss.
Settling on the Cheapest Policy
When you want to buy small business insurance, it will make great sense if you shop around since some insurers offer far better value than others. This doesn’t mean you should always settle on the cheapest small business insurance policy. After all, policies that cost least won’t be a bargain if it leaves you vulnerable to costly claims.
So, when looking for small business insurance policy it is definitely a good idea to obtain insurance quotes from multiple insurers, after which you should compare the proposals in detail. Be sure to consider the types and amounts of coverage each insurer has listed in its quote.
