If you own a business, it’s crucial that it is protected. Failing to do so could result in significant financial losses should any disaster strike. Inadequate or no insurance protection could spell disaster.

Though purchasing business insurance may seem intimidating, its rewards make the effort well worth your while. To prevent costly missteps when purchasing insurance policies for your assets, it’s essential to understand common pitfalls in purchasing coverage.

1. Buying the Cheapest Policy

When purchasing goods or services, such as laptops or office chairs, we usually do our research and search for the highest-quality, most cost-effective product available. Unfortunately, when it comes to business insurance policies, some small business owners make the mistake of opting for the cheapest policy instead of selecting an adequate plan tailored specifically to their company’s needs. While saving money by opting for cheap plans might sound attractive, many low-cost policies provide limited protection exposing you to certain risks that could threaten the wellbeing of your organization.

Furthermore, it’s essential to keep in mind that various factors will have an effect on your premiums, including factors like location, size and claims history. That’s why it is crucial to consult a reliable business insurance agent regarding your specific needs and risk tolerance so they can tailor an ideal policy tailored to suit them.

Your business’s needs will change over time, so it’s wise to arrange a review meeting with your insurance agent a few months prior to renewal date. That way, you can ensure your organization is protected against emerging risks while maintaining an optimal balance between affordability and comprehensive coverage. Alternatively, for greater savings consider purchasing a business owner package which bundles common policies like commercial property, general liability and workers compensation into one easy product.

2. Failing to Read Policies

Business insurance can provide essential protection for the future of your company from unexpected risks, but you must take the time to thoroughly analyze its needs in order to prevent making costly errors which could leave your firm without enough protection or worse, incurring fines because of insufficient coverage.

Commercial policies tend to be very long and written in legalese that is difficult to comprehend, yet an experienced commercial insurance broker should be able to guide you through their terms and conditions with ease. When purchasing or switching providers, it’s essential that you read through your agreement so you know exactly what coverage there is and doesn’t exist.

Be familiar with your coverage limits so that you can determine if there is adequate protection against risks such as accidents, data breaches or fire. Furthermore, ensure your policy allows scalability so you can expand it as your business expands.

As part of your policy, it is also necessary to list all assets owned or held by your business, such as computer systems, inventory and outbuildings. Although it is tempting to leave expensive equipment out because of cost concerns, doing so puts you at risk if a loss occurs without enough coverage in place.

3. Sticking with One Insurance Provider

Building a business takes time, dedication, and tenacity – so it is vital that you have adequate protection in place. However, that doesn’t mean choosing your policy solely based on cost; otherwise you could end up overpaying for coverage that doesn’t properly safeguard your organization.

One of the most frequent insurance mistakes is choosing an insurer who does not provide all of the types of coverage necessary for your business, even though they offer them at an acceptable cost. Instead, shop around until you find one with all of your desired policies at a competitive price.

Refusing to review policies regularly is another mistake that businesses make, which could leave them exposed to liability. Working with an experienced broker who knows your options well will be essential in finding an appropriate policy to suit your business needs.

If you need an insurance policy that fits the risks that are specific to your business, don’t hesitate to get in touch. Our team of insurance professionals is on standby and happy to answer all of your queries and provide a complimentary business insurance quote – start comparing quotes today by filling out our quick online form!

4. Failing to Shop Around

Running a business comes with many responsibilities, from satisfying customers and attracting new clients to managing payroll and maintaining adequate inventories. Unfortunately, one area often forgotten in running a business is properly covering risks with insurance policies; failing to do so could leave your organization exposed financially in case of accidents, property damage or other unplanned incidents.

Small business owners who mistakenly believe all commercial insurance policies are the same are in for a surprise: coverage and cost vary significantly across insurers, making it essential to shop around before selecting an insurer and policy.

Many businesses opt for a Business Owner’s Policy (BOP), which offers several forms of protection such as property, business interruption and general liability policies rolled into one cost-effective policy. When purchasing such coverage it is crucial that all your needs are covered before signing.

Some companies may opt to purchase only the minimum commercial insurance required, such as a small business owners policy that doesn’t include workers’ compensation or auto policies. This could leave their business exposed to risks.