Top 4 business insurance mistakes

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Running a business often means dedicating all your time and effort to it, so you don’t want one incident or mistake to bring down the business you have worked so hard to build! Choosing the wrong insurance for your business is one mistake you cannot afford to make.

Business insurance can help protect you and your business when it needs it most so placing the right insurance is a must. Obtaining the right insurance means avoiding common mistakes that many business owners make in choosing the best insurance policy for their businesses. Below are 4 common mistakes, you can avoid:

    • Not considering business insurance important

The biggest mistake business owners commit is not considering business insurance important. Some small business owners believe as they are small they can trade without business insurance. But it is important to understand that a business, whether small or big, should obtain insurance. Not having business insurance is inviting trouble, when the decision to seek protection & place insurance can cover your business against potential losses. Even if you are a start up and funds are scarce do not compromise with inadequate coverage. Ideally, create a budget for insurance at the business planning stage and take the best cover for your needs well in time. Pay by the month funding makes insurance viable.

    • Lapse in obtaining timely insurance

Letting your insurance lapse is like not having insurance at all. If you don’t renew your insurance policy, you will end up paying for any damages from a lawsuit or a calamity by yourself.

    • Obtaining the wrong insurance

Many business owners consider buying business insurance through retail insurance companies they are dealing for the car or home insurance. They find this as an easy option, without realising that insurers that specialise in car insurance or a property insurance company may not necessarily recommend the best business insurance policies for you.  These “direct insurers”, can only offer you their own policy so are biased. They cannot access the entire business insurance market. Therefore, it is usually not the best idea to buy your business insurance policy from a direct insurer. Rather talk to a business insurance specialist at an insurance broker who can act for you.

    • Failing to update your insurance policy to reflect new information

Another mistake to avoid as a business owner is not informing your insurance broker about a change in business activities or assets. This means, should there be an issue etc. you may end up struggling to get a claim paid in part or in full.

General advice Disclaimer

This Blog contains general advice only. It has been prepared without taking into account your particular objectives, financial situation or needs. Before acting on the advice, you should consider the appropriateness of the advice, having regard to your objectives, financial situation and needs.

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