Establishing and managing a business involves taking steps like designing a business plan, creating goods or services amongst other things. There is hardly anyone who starts a business and wants to be facing challenges all the time. All businesses have peculiar risks which may be as a result of internal or external factors. The truth is that they are inevitable and the best thing do to in order to keep the business safe is acquiring insurance.
One of the top reasons why many startups avoid insurance is the belief that it is very costly. However, there are budget friendly small business insurance options that can help a business to save cost if the unexpected happens. Let’s take a look at some of the insurance mistakes that must be avoided at all costs.
Not investing in business interruption insurance
It’s imperative to keep a proper record of information that include sales, payroll, projected revenue and inventory. Almost all insurers usually request for a proof of loss before a business can make claim of business income insurance. This type of insurance protects the business income during an interruption. In addition, it ensures that expenses are paid and helps business owners to recover income while repair is going on. Ignoring business income insurance can make a business to close down when disaster strikes.
Failing to get the right coverage
The types of coverage you choose should be able to cater for your insurance needs. You need to consider factors like the type of business you are operating, location, employees and equipment before getting insurance. Shop around and weigh your options carefully. Although many small businesses are often advised to opt for a general liability insurance, it can’t offer protection from all risks.
Working with the wrong agent
Apart from offering advice on different types of insurance and the best rates, an insurance agent will explain everything in layman’s terms. Even if you have a basic knowledge of insurance, hiring an expert agent will help you to avoid many risks. Handling it on your own can really take time. Get in touch with an experienced insurance agent that is suited for your type of business and industry. It’s advisable to start looking for a new agent once you discover that the service quality of the current one is declining.
Skipping on regular coverage review
Every entrepreneur desires a brand that will keep thriving and expanding over time. Without gainsaying, your insurance needs are bound to alter as your business expands. For instance, during the period of implementing marketing campaigns, acquiring new equipment or moving to a new location. Endeavor to meet with your agent so as to review and adjust your policy accordingly. At times, you don’t have to wait till the policy expires before taking this step.
Not understanding the policy
As you read the insurance policy, make sure that you comprehend every aspect of it. Later on, you can schedule a meeting with your insurance agent and discuss about the insurance plan, including the aspects that remain unclear. In situations that you are clueless about the type of coverage you need, don’t hesitate to inform your broker too.