5 common business insurance mistakes costing you money

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Running a business comes with inherent risks. As a business owner, you assume responsibility for the well-being of a number of people, from employees to customers. And if things go wrong, it’s crucial that your assets, both business and personal, are protected. Business insurance is one of the best ways to do this.

However, business insurance policies offer their own form of risk. Buying insurance can be difficult and takes time, and there are common mistakes that many business owners learn about the hard way. In the unfortunate event of a fire, car accident or injury, you’ll want to know that your policy covers the expenses incurred.

So, what are some of the common insurance mistakes business owners make and how can you avoid them?

Choosing the cheapest policies

More common amongst small business owners who are trying to save money, cutting costs on your business insurance can leave you under-covered. While it pays off to shop around, since some insurers offer better value than others, this doesn’t mean you should always choose the cheapest policy. The policy that costs the least won’t feel like a bargain anymore if it leaves you vulnerable to costly claims. And if you’re hit with a claim that exceeds the limits of your cheap insurance policy, you’re left picking up the pieces.

Failing to adjust your coverage as the business changes

As your business grows, it’s possible for it to outgrow its original coverage policy. Your growing business is likely worth more than it was five years ago and as your business changes, so must your insurance. Keep your insurance broker updated on the changes happening within your business, such as hiring new employees, purchasing new assets or expanding your space, so that you can update your policy as necessary.

Forgetting workers’ compensation

Workers’ compensation is absolutely necessary, even if you only employ a small team in a seemingly low-risk industry. It not only protects employees, but also indemnifies your business against work-related injuries. Accidents happen, and when they do, having a sound workers’ compensation policy in place is key to protecting yourself and your employees.

Being over insured

Believe it or not, there is such a thing as being over insured. When your business is covered by insurance that you don’t particularly need, you risk overpaying for your policy. You don’t need to insure your property for R40 million when it would only cost you R12 million to completely rebuild. This is where it’s important that you find a broker that you know you can trust.

Skimming over the fine print

Business insurance policies are made up of warranties and conditions precedent, and failure to comply with them could lead to a claim being rejected or, worse, your entire policy being invalidated. Common examples include warranties and conditions that expect you to have a certain level of security at your premises, or check the insurance policies of your subcontractors. It’s important to understand exactly what a policy covers you for and what the terms and conditions are so that you know whether you can comply with them.

Selecting your business insurance policies can be overwhelming and complicated, and it’s hard to know whether you’re making any common mistakes. Knowing exactly what your business needs can be challenging, which is where our pool of indispensable insurance brokers come in. If you need help navigating the world of corporate insurance, let us help you! Contact us today.

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