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Common Small Business Insurance Mistakes

Common Small Business Insurance Mistakes

Small business enterprises are widely regarded as the spine of the U.S economy. As per the Governmental Agency Small Business Administration(SBA), small businesses constitute about 47.5% of employment in the private sector.

Business Insurance Coverage in Conyers, GA | The Tabb Insurance Agency

At the helms of budding small businesses are business owners who often have to wear multiple hats to make sure their enterprises are thriving. However, while the ability to multitask is quite admirable, small business owners may lack expertise in certain areas, business insurance being one of them. 

 

Shopping for small business insurance can be confusing, exhausting, and time-consuming, especially for new startups. Efforts to cut corners and save time and money can have the business spending more time and money down the road

Here are a few examples of the common mistakes small business owners make when buying Business Insurance in Conyers, GA.

Mistake 1: Assuming Your Operations Are Too Small for Insurance

You may have only just launched your business or have a small enterprise going on with low overheads and a small turnover. It is easy to feel like there’s nothing much to insure in such scenarios, but the truth is, every dollar counts, especially for a small business that can’t afford inconveniences. 

Insurance may seem like an unnecessary cost, but what you end up paying to fix damaged equipment or handle a lawsuit could be more costly than what you pay in insurance premiums.

Mistake 2: Buying a Cheap Policy on the Internet

Many insurance service providers are now offering business insurance as a commodity that can be sold online. Naturally, this has reeled in many small businesses owners who find buying business insurance a complicated process in between the many company responsibilities they have to take charge of.  While there is nothing particularly wrong or illegal about buying an insurance policy online, but convenience doesn’t exactly mean that it’s the best deal for your business. You need to keep in mind that business insurance can be very intricate. Insurance agents can use their better understanding of insurance limits to manipulate you into committing to a bad deal when you think you’ve bought well.  

Mistake 3: Ignoring Workers’ Compensation Insurance

Choosing to ignore investing in workers’ compensation can potentially cost your business tens of thousands of dollars, if not more.  If your employee gets hurt while working for you, you’ll have to pay for their medical expenses unless you have workers’ compensation. It may seem a tad expensive, but it’ll cost you a lot less compared to paying for an injury or legal settlements out of pocket. 

Choosing to ignore investing in workers’ compensation can potentially cost your business tens of thousands of dollars, if not more.  If your employee gets hurt while working for you, you’ll have to pay for their medical expenses unless you have workers’ compensation. It may seem a tad expensive, but it’ll cost you a lot less compared to paying for an injury or legal settlements out of pocket. 

Worker's Compensation Insurance in Conyers, GA | The Tabb Insurance Agency

Mistake 4: Not Reading the Fine Print

As much as insurance policies are often long and incredibly detailed, you want to read the contract and understand its terms before making any commitments. Small business insurance policies often constitute various warranties, terms, and conditions. Not complying with the agreed terms can lead to your insurance claims being revoked or your entire policy being rendered invalid.  For instance, some insurance companies may consent to compensate you for stolen equipment only if certain security measures were in place. Therefore, bear in mind that the devil is in the details, and you need to make sure that you fully understand the terms of your contract and if you can comply with them. 

Mistake 5: Being Underinsured

Working hard to get your business off the ground is no easy feat, and every penny counts. We understand there is little to no room to accommodate unnecessary costs when trying to make your business profitable.  In between cutting costs and making your operations more efficient, you may think that nothing unfortunate may happen to you and can take the gamble of proceeding with underinsurance.  However, being underinsured will mean being under-compensated. For example, let’s say you insure business assets worth $75,000 for a sum of $50,000. If a fire breaks out and causes damages worth $20,000, your insurance company will give you less in compensation than you would have received had you insured your equipment at the right replacement value. 

Mistake 6: Buying the Wrong Insurance Policy

small business owners don’t understand the insurance policies, or their insurance agent doesn’t have a strong familiarity with the business’s industry of operation, thus misadvising their clients. For example, some business owners are wrongly led to believe that if they operate from home and their house gets broken into and robbed, their home insurance will step in to cover the damages. As such, it behooves every business owner to do diligent research while shopping to know your insurance options. Make sure your ideal policy is in line with your business needs. Try and understand the differences between personal insurance and business insurance, especially since your personal life and work-life may be strongly intertwined. Additionally, ensure that you work with a local agent who not only understands your industry of operation but has some experience dealing with other companies in your line of work. This way, you can be sure that they know the associated risks and can offer the right coverage for your business.

Business Insurance Provides a Great Safety Net Against Unexpected Events

The pressure to make something out of their small ventures can be tough for small business owners. But the truth is that no matter how much progress your enterprise has made, an unfortunate event can severely dent your business. Yes, insurance is complicated, and it can be overwhelming figuring out what insurance is ideal for your small business. But people in unfortunate circumstances usually take issue with the coverage they did not have when they needed it rather than the coverage they have, and you don’t want to end up in regrets. That’s where Tabb Insurance Agency comes in. We know how hard it is to run your business, and so our services are designed to help you navigate the world of insurance with ease. 

 

Reach out to us today at 770-483-1800 for a free quote and consultation on how you can give your investment the best level of protection.