Many business owners make critical insurance mistakes that can leave them vulnerable when they need protection most. Here are the top mistakes to avoid.
1. Being Underinsured
Many businesses carry insufficient coverage limits:
- Regularly review and update coverage amounts
- Consider inflation and business growth
- Don't just focus on premium costs
2. Not Reading Your Policy
Understanding your coverage is crucial:
- Review policy exclusions
- Understand coverage triggers
- Know your deductibles and limits
3. Focusing Only on Price
The cheapest policy isn't always the best:
- Compare coverage features
- Consider insurer financial strength
- Evaluate claims service quality
4. Neglecting to Update Coverage
Business changes require coverage updates:
- New locations or equipment
- Additional employees
- New products or services
- Changes in business operations
5. Assuming You're Covered
Don't make assumptions about coverage:
- Cyber risks often require separate coverage
- Flood damage typically excluded
- Professional services may need E&O insurance
Other Critical Mistakes
- Not working with experienced agents
- Failing to document assets properly
- Ignoring risk management
- Not reviewing policies annually
- Delaying claims reporting