Small business owners always have a lot on their plate. Just handling the day-to-day of running a business is a monumental task.
This often leads entrepreneurs to overlook one of the most crucial elements of business: business insurance. This can be a costly error.
Protecting your business from property damage, liability risks, and more can be a complicated process, but if you can avoid these simple mistakes small business owners tend to make regarding their business insurance, you can be confident that your business is well-protected.
Top 5 Insurance Mistakes Small Businesses Make
Underinsuring Your Business
More than any other mistake, most businesses are seriously underinsured. Approximately 75% of American businesses are underinsured by 40% or more.
Many entrepreneurs choose standardized policies or state minimum policies to save on costs or due to the inherent complexities of insuring a business.
This mistake could potentially lead to severe financial losses for the business owner.
Misjudging Liability Risks
Corporations aren’t the only businesses that should concern themselves with liability. Many small business owners undervalue liability insurance due to cost concerns or a belief that their business is too small to be sued.
It’s important also to consider if your business needs professional or product liability coverages, which are an absolute necessity in some industries.
Neglecting Commercial Auto Insurance
If your business involves travel or you use a business vehicle, commercial auto insurance should be a part of your policy.
Personal auto policies do not apply if an employee is driving a company vehicle, commercial auto insurance has to carry protection for that vehicle.
With the cost of owning and maintaining vehicles continually rising, you’ll want to know your business vehicle is covered in case of an accident. Don’t skimp on commercial auto insurance for your business fleet.
Not Evolving Business Insurance Alongside Your Business
As your business grows, you may introduce new products, expand your workforce, or provide new services. Any of these growth points should come with a reassessment of your business insurance policy.
So many American businesses start off well-insured, but as they grow and evolve, their coverage stays the same.
Unfortunately, this often leaves those businesses highly underinsured. If something unexpected happens, all of that growth could be for naught.
Constant communication with your agent and reassessment of your coverage make sure that your policy is working for you, not against you.
Choosing Low Cost Over High-Value Business Insurance
Small businesses always work with low overheads and seek to maximize the profit they can while providing value to their local community.
Therefore, it’s easy to understand why the cost of high-quality business insurance can be daunting to an entrepreneur.
However, a good agent, like one of our insurance experts at TSL, can help you find a high-value, customized policy that works for your business, with all of the coverage you need, and nothing you don’t.
In short, properly insure your business by assessing your risks, determining what kind of insurance is right for you, and then executing a plan to make sure that your coverage evolves to fit the ever-changing business landscape.
It may seem daunting, but if you reach out to one of our insurance experts at our offices in Lafayette, Baton Rouge, Lutcher, Franklin, or Abbeville for a commercial insurance quote, we can walk you through every step of the process to ensure you understand everything that business insurance can do to protect your investment.
With locations across Louisiana, we are well-equipped to provide quotes and advice to businesses of all sizes in all areas of the state. Contact us today for a free commercial insurance quote to get started securing comprehensive protection for your business.