By Hannah Corbett
Most entrepreneurs and small business owners recognize the importance of having the right insurance, but unfortunately many still fall victim to making simple mistakes. The most common mistakes made by business owners are usually very small in themselves, but can have momentous consequences.
Failure to update
Once you put insurance in place for your business, it’s easy to forget about it, and just assume it can be left to do its job. But, it’s absolutely crucial that you revisit and revise your business insurance policy regularly, and update it to account for any ways that your business’s circumstances may have changed. This is particularly true for startup businesses that are continually growing and changing. Failing to update your insurance policy could actually render it null and void, leaving your business at risk and vulnerable to threat.
Many businesses actually have inaccurate cover in place, due to under or over insuring. This is often done accidentally, as business owners may be confused as to which policies they actually need. But, sometimes under insuring is done intentionally, often due to a, “what are the chances,” attitude, or an attempt to lower insurance premiums. Having inaccurate cover is so easily done, but is incredibly dangerous for your business. Without the right insurance in place, one claim against you has the power to inflict irrevocable damage, and potentially even bankrupt your business entirely.
Cost is always at the forefront of any business owner’s mind, and insurance is an area often targeted in money saving efforts. But, there are right ways and wrong ways to do this. You should never neglect to take out certain forms of cover in order to reduce premiums, as it can leave your business at risk, and leave you to fend for yourself should a claim be brought against you. Instead, you can try improving your business’s safety and security measures, so that you present a lower risk to the insurer. Measures such as installing modern alarm systems or updating the locks on windows and doors can be surprisingly successful in reducing insurance premiums.
Unfortunately, many business owners don’t manage to sidestep these pitfalls, and the consequences they bring. By avoiding making simple mistakes, you can make sure you’re getting the most out of your business insurance. Always make sure you fully understand your business’s insurance needs, and don’t hesitate to ask your insurance broker if you have any questions or need explanations.
Hannah Corbett is a business startup enthusiast and writer for Make It Cheaper. To keep up to date with the latest in the business and startup world, follower her on Twitter or Google+. For more on business insurance, visit Make It Cheaper. Follow her on Twitter and G+.