Purchasing too much coverage than what you need is a costly mistake. FILE PHOTO | NMG
As a business owner it is important for you to incorporate
protective solutions in the heart of your business to shield it from
unexpected issues setbacks.
Not only do insurance
solutions provide you with peace of mind but also ensure that you have a
place to start in the event of any disaster.
However,
knowing the right insurance choices to make can be tricky and below are
some of the mistakes you should avoid when selecting the right policy
for your business:
Failing to understand how your policy works
Insurance
policies could be quite complicated, but the easiest way to understand
them is to read the list of endorsements, inclusions and exclusions
toknow the ins and outs of your policy.
Buying a policy based on price rather than value
Most
small business owners treat insurance as a commodity and as a result
purchase based on price rather than value. It is Important that the
policy offers the coverage to meet your business needs. Cheap policies
are not always the best for your business. Remember cheap is always
expensive.
Not having sufficient disaster insurance
Small
business owners are not insuring themselves sufficiently against the
threats they consider most damaging. Most with less than a month of
reserves consider floods, fires, and other nature-related disasters as
extremely damaging. However, only a few have disaster insurance, because
some think that such disasters are very rare and might not happen to
them.
Forgetting about business overhead protection
While
products such as liability and property insurance are often top on the
mind of a small business owner, policies to protect the business should
he be unable to work are often overlooked. Known as business overhead
protection, these policies are structured to pay many of the business
expenses should the owner become sick or injured for an extended period
of time. These policies can pay for deductible expenses such as payroll,
other types of insurance, utilities, and even rent/lease.
Not Understanding limits & terms of policies
One
common mistake in purchasing insurance is not understanding the true
implications of all the limits and terms of the policies. Insurance
policies can be tricky with many industry-specific terms that need to be
understood. It is crucial to read every single exclusion and
endorsement in the insurance policy and make sure you understand all the
details before you agree with the terms.
Being over-insured
Purchasing
too much coverage than what you need is a costly mistake need is a
costly mistake every business owner should avoid. Not all types of
insurance coverage are applicable for your business.
Always
seek help and advice from your insurance agent or insurance company in
order to help you make more informed decisions that will aid your
businesses continuity while offering the best protection solutions
possible.
The writer is CEO Resolution Insurance.
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