Going for the lowest possible premium. D’oh! Some businesses purchase the lowest possible level of coverage to keep their insurance premiums down. But that’s not always a good thing financially. Generally, the lower your premiums, the higher your deductible and other out-of-pocket expenses after a claim. Make sure you can afford to pay your deductible, plus your part of the financial cost, in the event of a disaster.
Failing to notify your agent of any changes in your business. It’s always a good idea to notify your insurance company about changes to your business. This may include hiring additional employees, purchasing new equipment or entering into new business territory. Your rates may go up or down, depending on the situation. Either way, you’ll want to be adequately covered.
Foregoing some types of coverage: Many business owners neglect to purchase some types of coverage, such as disability or umbrella. Ask your business insurance agent about what types of coverage you may be lacking. For example, if you become disabled, could your business survive without you for three months? What about six months or even a year? If the answer is no, you may need disability coverage. What if you are sued by a customer or client? Extra liability insurance in the form of an umbrella policy is cheap, but it can save you from going out of business in the event of a lawsuit.
Want some more information about blunders businesses should avoid? Read this report.