Buying Business Insurance? Avoid These Mistakes.

There is something that both start-ups and established businesses have in common – they both need business insurance.
You may be a knowledge leader in your local community when it comes to your business – but you may not know much about how to buy insurance. Obtaining appropriate coverage requires some expertise, and mistakes can easily occur. Here is a quick guide to some typical mistakes – and how to avoid them.

Automatically Choosing the Cheapest Option: Getting multiple quotes is a smart strategy when buying business insurance. But this is to identify the best benefits you can acquire at the best price – not to find the cheapest possible premium. The least expensive business insurance policy is not a deal if it doesn’t adequately protect your business. Instead, compare each quote in detail and evaluate the types and amounts of coverage each insurer has proposed. Important! Be sure to familiarize yourself with exclusions as well as inclusions – you don’t want to learn you aren’t covered after you’ve suffered a loss.
Not Purchasing Enough Liability Insurance: Any small business is vulnerable to a lawsuit, and legal action can pose a serious threat to financial stability and reputation. In fact, one significant claim can close the doors of your business. To protect your small business against lawsuits, be sure your general liability and auto liability insurance have sufficient limits. You may also need to adjust limits based upon a contract you are competing for or appeasing a landlord before allowing you to lease their property.
Opting for the Lowest Deductible: A deductible is that portion of the losses you will personally reimburse if there is a claim. If there is a loss, you pay a portion out of pocket, and the insurance company steps in to pay the balance of the claim. It may be tempting to select the lowest deductible amount to limit your exposure after a claim when purchasing commercial property insurance. However, if you raise your deductible, you may save significantly on your monthly premium. Choose the largest deductible your firm can comfortably absorb in the event of an incident.
Keeping the Same Coverage for Years: Most companies change over the years. Small companies may grow in size and scope, adding locations and hiring additional personnel. Companies may adjust the mix of products or services they offer to the public. When business characteristics change, insurance needs and requirements change as well. This is why it is wise to review your business insurance annually to represent your current business needs. If you have made a significant change to your business, notify your agent or insurer right away.
Not Understanding Your Policy: Poring over insurance policies may not sound very exciting, but it needs to be done. Reading and understanding your policy is the only way to ensure that risks are covered, and exclusions are acceptable. Don’t wait until an incident occurs to study your policies, as it is then too late to purchase what you need.
Make it a habit to discuss your policy with your insurance agent annually, and have them answer any questions you may have. You can then adjust your policy in any way necessary.
Not Covering Potential Income Loss: Many company owners are careful to obtain coverage for their physical business assets – but neglect to consider the loss of income that often occurs when business is interrupted. A company will lose revenue if its physical premises suffer a material loss and the business cannot operate at full or partial capacity. Business income coverage (business interruption insurance) reimburses your company for the income it would have earned if the loss had not taken place. It also covers expenses you are obligated to, whether or not your business is operating. (for instance, rent.)

If you are a business owner in Sarasota or Manatee County, call Anderson & Associates Insurance Group. We will walk you through your options and help you to choose the level of business coverage appropriate for your company.