As a small business owner, one of the best ways to protect your business is to buy the right forms of insurance coverage. However, there are insurance mistakes that can interfere with this protection. Below are some of these mistakes, and why you should avoid them.
Withholding Information
You need to be honest with your insurance company, even if the honesty will increase your premiums. For example, you should be honest about the number of employees you have and the types of activities or businesses you engage in, even those that you don't think of as your core activities.
Dishonesty can hurt you in three main ways. First, the carrier might cancel your coverage if they catch you lying. Secondly, the carrier is likely to decline claims related to your dishonesty. Lastly, dishonesty can easily lead to incomplete or inadequate coverage.
Not Accounting For All Risks
It is rare to find a single insurance policy that covers all business risks. Even the famous business owner's policy (BOP) excludes some risks, such as those caused by water damage. Therefore, evaluate your business' risks and augment your coverage as necessary. For example, you can buy insurance rudders for coverage not included in your main policy.
Keeping Poor Records
Keeping good records is necessary for two main reasons. For one, good record-keeping helps you to gauge how much coverage you need. For example, you can use your records to estimate how much you would lose in case of business interruptions. Good records can also help you when auditing losses so that you can know the value of your damages as well as the measures to adopt to avoid similar occurrences in the future.
Failing To Understand Your Policy
Read your policy document thoroughly and get clarification from your agent or insurance company if you don't understand anything. Otherwise, you might learn that your coverage is inadequate at the last minute when you can't do anything about the inadequacy. Most insurance policies come with terms and conditions, the so-called small print, which policyholders should know.
Renewing Coverage Automatically
Lastly, it is also a mistake to keep renewing your coverage automatically every year. The insurance landscape is constantly evolving. Businesses also evolve. Both of these issues mean you may not need the same coverage or have to pay the same rates year after year. Review your insurance at every renewal time to ensure that you have the best policy at all times.
For more information, contact a company like United Counties Insurance Group.
Share22 January 2020
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