Common Mistakes Made When Obtaining Business Owners Insurance

As business, home, and auto owners, we purchase insurance in the event that the unthinkable occurs. Unfortunately for some who do not have business owners insurance, by the time you need it, it is too late to ensure that you have the right type and amount of insurance coverage. Be sure to avoid making the following mistakes while securing financial protection against danger through the purchase of business owners insurance.

  1. Not Shopping Around. One of the most typical mistakes is that people do not shop around enough for business owners insurance. If business owners would take the time to read the insurance buyers guides that are always offered by their state insurance departments, in addition to making calls to a few different insurance companies, then that could make a considerable difference in the price they pay for business owners insurance.
  2. Only Comparing Rates (and nothing else). While cost is largely a determining factor, it is highly important to rate a business owners insurance or other insurance company on their financial stability and level of customer service as well. What many people may not know is that they can check out insurance companies by looking at exactly how they rank with third-party insurance rating companies, such as A.M. Best, Fitch Ratings, and Standard & Poor’s. With these rating systems, a prospective customer can also scope out an insurance company’s complaint ratio. What is also good to know is that several state insurance departments frequently publish the rating information, while the Web site of the National Association of Insurance Commissioners publishes the numbers.
  3. Not Comparing Agents. As in all businesses, no two agents are created equal. What a prospective business owners insurance customer should first do is ensure that the insurance agent he or she is working with is properly licensed. You can find out this information by consulting with your state department of insurance. Once you have done this, then be sure to get referrals and ask the agent a list of questions that you have put together beforehand. (Be sure to do your research on what kinds of questions to ask!)
  4. Not Knowing Your Insurance Policy. Perhaps the biggest mistake a consumer can make is not knowing what is in the fine print of their policies, such as what his or her deductibles are, as well as what exactly is covered should disaster strike. Talk with your agent to find out specifically what is and is not covered, and ask to do a business owners insurance evaluation each year. (After all, business grow and change!)
  5. Failing to Buy Certain Types of Insurance. You may have all the types of business owners insurance that you need, but what about your employees? As an employer, you should be well aware of the different types of insurances to offer your employees, which include health insurance, life insurance, workers compensation insurance, and disability insurance.
  6. Buying Unnecessary Policies. While the problem exists where business owners do not purchase enough coverage, there is also the mistake they can make of buying the wrong type of coverage. For instance, most people do not need life insurance for their children. While the death of a child is indeed tragic, financially it is not as detrimental of the head of the household passing away. Additionally, be aware of purchasing variants of broader types of insurance that are too specific.
  7. Failing to Update Your Coverage. Life brings about a number of changes. Be sure to evaluate your coverage whenever you go through a major life change, such as having a child or getting married. Once a year is sufficient enough to review your insurance coverage.

Errors while sending email. Please try again later.

Comments (0)

Leave a Reply