Never buy a policy only because it's the least expensive. Some business owners opt for the cheapest policy right away. That's a big mistake because you need to check the coverage first. Often, the most affordable policy doesn't give a significant, useful coverage at all.
Buying Property Insurance That’s Too Little
Most business owners buy property insurance, but they don't purchase enough limits. However, policyholders should make sure that the property insurance should include coverage for replacement cost for damaged property. Also, don't underinsure your property. Be aware that most property insurance policies must consist of an agreed value provision. This provision will impose a penalty if you have underinsured your property.
Failure to Adjust Your Coverage When Your Business Undergoes Changes
As businesses change, owners should be sensitive to the changes. Business owners need to update their insurance agents about how their business has changed over time. If you haven't done this lately, you need to do it. You do this to make sure that your coverage and limits would be able to accommodate the new specifics.
Betting on Low Liability Limits
Lawsuits are very unpredictable, and someone can hit your business with a lawsuit. Business owners can never predict when this will happen or how much they have to pay for the damages. Thus, never skimp on limits. Ask your broker for advice on how much insurance you need to buy for your business.
Choosing a Low Deductible
If you choose a low deductible, then you can save on insurance premiums. However, if you've chosen low deductibles, it means that you'll be paying more premiums. You also won't be able to avoid spending more on adjusting small claims. If you end up not using your insurance policy, then you didn't save much by paying hefty premiums.
Some Final Words
There are many pitfalls that business owners commit when buying business insurance. However, you need to watch out for these pitfalls to avoid them. Also, you need to work with your financial adviser or insurance agent. This is so that you won't commit so many other pitfalls when buying your first business insurance.
At Western Pacific Insurance, we do our best in making sure that our clients are well-protected with affordable and comprehensive policies. We make sure to go the extra mile to help you with your needs. To learn more about how we can help you, please contact our agency at 702-932-3105 or Click Here to request a free quote.