Buying The RIGHT Business Insurance
When you buy insurance, you’re not just buying protection from a potential catastrophe – you’re also investing in your future. When disaster strikes and you need to make a claim, the right insurance policy can be the difference between being able to get back on your feet and being financially ruined.
Read on to learn about some of the worst mistakes that people make when buying insurance. This information will help you avoid making these same mistakes so that your investments are well-placed from the very beginning.
Whether you’re just starting out in business or thinking about updating your current policy, this advice will serve as a helpful refresher for any future insurance needs.
Don’t Shop for Cover Based on Price Alone
You can have the best intentions when buying insurance, but if you only shop on price alone, you might end up with a policy that doesn’t actually cover you. Price is a factor to keep in mind, but it shouldn’t be the only thing you’re looking at. You also want to make sure that the policy fits your unique needs and situation. Some policies may seem like a bargain at first, but if you don’t actually qualify for the protection, you’ve wasted your money so you’ll need to shop around to find the right fit for your situation.
Price alone should not be your only consideration when buying insurance. While it’s important to not overspend on a policy that you don’t need, you also shouldn’t skimp and leave yourself under-protected. You don’t want to be the person who bought an extremely cheap policy and then ended up having to pay a fortune out of your own pocket when a claim happens.
Don’t Expect Your Insurance to Pay For Everything
No matter what type of insurance policy you have, there’s a very small chance that it’ll fully cover every single risk you want it to. Each policy has its own coverage limits and exclusions, and it’s important to understand these so that you don’t end up expecting too much from your insurance provider.
Unfortunately, not all insurance policies are created equal. Even if you have top-notch cover, there’s no guarantee that your insurer will pay out your claim in full. It all comes down to the specific details of your policy. For instance, If you make a claim that’s greater then the maximum payout on a specific loss, or claim for something which, it turns out, isn.t actually covered, you’re out of luck, so it is essential that you understand the fine print on your policy before you buy it. Otherwise, you could find yourself in a situation where you need your insurance but it isn’t really up to the job.
Don’t Be Scared of Annual Reviewing
it’s important to keep an eye on your insurance cover and make sure that it still fits your needs. If your business is new and fairly small you may think that you can just get the cheapest policy you can find and forget about it. While this may be true in the short term, there’s no guarantee that it’ll be true in the future.
At least once a year take a look at your cover, your premiums, and your potential claims. By keeping an eye on these factors as they change over time, you can make sure you’re always getting the most out of your investment. You might discover that you no longer need some of the policies that you originally purchased, or you might find that other policies are now more appropriate.
Make Sure Your Emergency Fund Is Adequate
Whatever type of insurance policy you have, it will never fully cover all of your financial needs. Every policy has a policy excess that the insurance company expects you to pay for out of your own pocket. By opting for a large excess you can often reduce premiums substantially, but do bear in mind that if a claim is necessary then you will need to produce this money at very short notice. Make sure this sum is available - or take a look at the excess you have to pay, and think carefully about whether or not you would be better off with a policy requiring a lower one.
Don’t forget to check the fine print.
This is especially important if you’re shopping for home insurance. Many policies come with a provision that covers your house’s contents in the event of a disaster. But you may need to read the fine print to be sure that your policy will actually pay out on these items. Some policies, for example, will not cover jewelry or art work. Others may have a cap on the amount that they’ll pay for electronics. It’s worth taking a few minutes to check the fine print on your policy so that you know what is and isn’t covered. If your insurance company is refusing to pay out for certain items, you’ll at least know that it’s not your fault.
Consider using a Good Broker
When you’re shopping around for a new policy, you might be tempted to just go to the first insurance company that you find. There are a lot of companies that offer insurance, so why not just go with the one that’s closest? This is a mistake that many people make. If you don’t take the time to shop around and find the best broker for your needs, you might end up with a policy that isn’t actually the best fit for you. A good broker will take the time to understand exactly what your needs are and help you find the best policy for your situation. It’s important to choose a broker that specialises in your type of business and will have a good understanding of what kind of insurance you are likely to need.
What is the most important type of insurance for a small business?
Leaving aside Employers Liability Insurance (which is likely to be a legal necessity) if you had to pick one type of insurance — one policy you could not afford to be without — it might well be public liability insurance. This may protect you in the event that someone is harmed while on your property or while using your product or service, and they decide to sue you.
If you’re in business, you have a legal obligation to protect your customers, employees, and anyone else who comes into contact with your business. If anything goes wrong and someone is injured, or if they suffer a loss because of your business activities, you could be held legally liable; but public liability insurance can cover you in the event that someone sues you.
Many business owners assume that if something goes wrong, customers will be understanding. Sadly, that’s not always the case. Liability lawsuits can be expensive — even small claims can be costly if they go to trial, since the plaintiff’s legal fees are typically paid by the losing party.
If this weren’t enough of a reason to get business liability insurance, being covered will also help you retain customers. If someone is injured at your business and wins a lawsuit, the court will seek to get their money from you. If you don’t have insurance, you might not only face catastrophic costs that could threaten the viability of your business, but could lose a lot of customer goodwill and confidence too.
Buying insurance isn’t just about protecting yourself from potential catastrophes. It’s also an investment in your future. The right policy can protect you from a wide variety of emergencies and help you save money in the long run. When you shop for insurance, you want to make sure to take a look at more than just the price. You also want to consider the coverage that’s being offered, the reputation of the company, and the ease of filing a claim if something does go wrong. It’s important to make sure that you don’t just check the price tag on each policy. You should also make sure that you know exactly what you’re getting for that price.
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