4 Mistakes You Should Avoid When Buying Business Insurance

0

4 Mistakes You Should Avoid When Buying Business Insurance

woman-doing-stop-gesture-with-palm-at-camera

When starting a business, one key factor to consider is what type of insurance caters to the specific needs of your business or industry. In many cases, you might even need multiple policies. And with a wide selection of insurance policies available, business owners may find it challenging to buy the right coverage for their operations.

To help with the selection process, here are four of the most common insurance mistakes businesses make you should avoid when buying insurance.

1. Assuming Your Home Is Covered

Many business owners who operate out of their homes think that homeowner’s insurance covers their business as well. But homeowner’s insurance provides coverage for the home — if you have a home-based company, you still need a business policy that covers structures, equipment, and other items used for business purposes. Here are a few types of coverage to consider:

  • Commercial Property InsuranceApplies to both home and business use
  • Premises Liability Insurance: Covers injuries within the home-based office
  • Error and Omission Liability Insurance: Coverage for mistakes when offering professional services
  • General Liability Insurance: Provides wider coverage

    Easy & Quick Business Insurance   We've Partnered with CoverWallet to Help You Navigate and Find Business  Insurance that is Tailored for You Learn More

2. Forgetting Workers Compensation Coverage

Workers Compensation is required by law in most states. But even if state regulations don't require this coverage, it is still advisable to get it so you can protect your workers and secure the business against work-related injuries and medical costs.

What if a business doesn’t have employees? There are instances where founders should consider buying a policy anyway. Aside from the fact that it may be required by the state, business owners should carry this coverage if they use contractors or leased workers. Independent contractors also may need to buy this policy if the jobs they secure will require it.

3. Getting Over Insured

It’s essential to buy comprehensive coverage for your business, but buying insurance products that don't meet your needs is just a waste of money. An insurance agent can help identify the specific needs of your business so you get exactly what you need. Consider using an insurance checklist to assess your risks and determine the types of business insurance needed. Also, every business owner needs to read and understand the fine print of their policy — and ask questions to ensure your company is protected.

4. Failing to Update Policies Regularly

As the company grows, many businesses fail to check and update their insurance. What used to be comprehensive may not be enough to cover the needs of your business any longer. Make sure to review your policies every quarter, and keep a list of any changes such as hiring more employees and buying additional equipment and vehicles. If coverage limits should be updated or new coverage is needed, make these changes as soon as possible to keep your business protected.

40% of Small Businesses Are Still Uninsured. If You Are Among Them, Protect Your Business Today with CoverWallet.
0
Paper List

Like What You're Reading?

Get fresh monthly tips to start & grow your LLC.

Related Articles

  • 32 Side Hustles from Home That Pay More Than $100 an Hour
  • 15 Items You Can Easily Flip for $100-$5,000 in Profit a Month
  • A Giant List of Self-Employment Ideas
  • 11 Out-of-the-Box Side Hustles for Women to Make an Extra $1,000 a Month
  • How to Pay Yourself as an LLC Owner
  • What Is an LLC? Super-Simplified Infographic
  • If You're Not a U.S. Citizen, Can You Get an EIN for Your Business?
  • So You Moved? Follow This Guide to Moving Your LLC to Another State
  • Understanding DBAs and How They May Be Beneficial to Your Small Business
  • Are Non-U.S. Residents Allowed to Own a Corporation or LLC?
  • 15 U.S. States with the Lowest State Fee to Start a Business Today
  • Need a Physical Address for Your Business?
  • How to Create and File an LLC for Free
  • 5 Virtual Address Services for Your Small Business
  • LLC vs. S Corp: Which Is Right for Your Business?
  • S Corp vs. C Corp: Differences and Benefits of Each
  • Series LLC vs. LLC: Which One Do You Need?
  • 7 Home Business Ideas That Double as Tax Write-Offs
  • ​Do LLCs Get a 1099 During Tax Time?
  • ​Understanding When to Use LLC for Your Business