5 Common Mistakes Entrepreneurs Make When Insuring Their Business

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Finding the right insurance for your business is crucial if you want to protect your most prized possessions. However, it is important to remember that commercial insurance can be a very complex area and many people still make mistakes when it comes to finding the right insurance. Here are some of the most common mistakes people make when insuring their business?

Being Specific About Your Business

Most online quote websites have a drop down box containing very generic descriptions about businesses. Unfortunately, one description does not fit all and finding a description that will cover all your business can be challenging. Getting the description of your business wrong could lead to all sorts of problems should you need to make a claim. Sometimes getting a bespoke business insurance company is best in this situation.

Not Reading the Small Print

As mentioned before, commercial insurance can be a very complicated world and most policies are made of warranties, terms and conditions. Not meeting these could lead to a claim being turned down or even an entire policy being seen as invalid. These typically would centre around the security of the building, employees and much more. Ensure that you read your insurances policies, terms and condition, make key notes so you know exactly what terms the insurers are stating and then comply with them if you are happy.

Buying Based on Value

A good insurance company will have a good level of security, testimonials, accreditation, service and provide clear advice for you to understand the insurance.  A common mistake made by entrepreneurs is applying for insurance based purely on the low cost to them and minimal cover provided. This can be a detrimental decision made if you do not balance both value and quality correctly.

Not Doing Your Homework

Do not enter into an agreement of insurance unless you are 100% satisfied that you have found the right provider for your business. Once you are happy with your insurance provider it is important that you keep them aware of any changes to your business such as products and services being offered. Keep a record of any changes to the business’s activities such as the markets you are operating in and changes to the company headcount.

Getting the Wrong Insurance

A common mistake made by many people is that they do not understand the different types of insurance available to them and then they purchase the wrong one. For example, personal insurance and commercial insurance are two separate things and it is important to distinguish between them. The most common forms of personal insurance are the following:

  • Homeowners Insurance
  • Health Insurance
  • Renters Insurance
  • Auto Insurance
  • Life Insurance
  • Disability Insurance

Commercial forms of insurance you may come across are:

  • Claims of injury.
  • Property damage claims.
  • Claims of false advertising or fraud.
  • Claims of libel or slander.
  • Claims of negligence stemming from business activities.

In conclusion, it can be very easy to make any of these mistakes when seeking insurance for the first time an entrepreneur. However, with the right research and planning in place, your business can avoid these errors and find the right level of protection for your needs