Every business is established on an unpredictable foundation, we commonly refer to as ‘risk’. It is common knowledge that business is based on a variety of factors that range from external events to internal issues. Each business is a result of relentless effort and an investment both in terms of time and capital. As such, protecting a business to whatever extent possible becomes imperative. Business Insurance does just that. It protects the business from losses that may occur during the normal course of its operation. There are various kinds of business insurance – liability, property, worker’s compensation and data break insurance, only to name a few.
Insuring one’s business is important in that it allows for ease of operation. Indemnifying a business against unpredictable events ensure bold operations and concentrated efforts on business growth and development. It can also help keep the company afloat at times when the business is sued or matters are yet to be decided in courts of law. Here’s a listing of mistakes you can avoid while choosing a policy for your business:
1. Choosing a general insurance policy
Every business is defined by its nature of operations and clients, among an array of other factors. Buying an umbrella policy is therefore not advisable. It is essential that the business be assessed in terms of its personal character. Factors like the industry it operates in, possible employee claims, product or service orientation and property valuation are likely to indicate the kind of policy the business requires.
2. Not doing a detailed study
It does not merely suffice to do a study on the kind of policy required. It is equally important to research and compare on competitive policies in the market, their pricing and coverage offered. Hasty decisions may lead to increased policy purchase expenses and a disproportionate insurance cover for the business.
3. Not choosing a specialist
There is often a dilemma on whether to choose an insurance agent or a broker. While by definition, a broker represents the business and an agent represents the insurance company, it is advisable to opt for an industry specialist who can assess your personal needs and suggest a policy that perfectly suits your business. Be sure to consider the company/broker’s history and record before you invest in an insurance policy.
4. Not being aware of the law
Every business owner must be aware of the law or have in place a lawyer who can keep him/her well-informed of his/her rights. While claims and settlements are to be made, law can provide clarity on the fairness of such events and circumstances.
5. Being stagnant
Businesses are volatile in that they alter with changing times, markets and circumstances. It therefore becomes necessary to review the risks your business faces with every passing year. Be sure to consider past events, possible risks and events that can create a drain on the pocket while opting for a suitable business insurance policy.