When filing for a business insurance policy, you are required to make a disclosure at the time that you apply for insurance. This is the policy that details any and all damages that the business will be responsible for paying. The most common types of errors in this type of paperwork include misspellings, duplicate names, and gaps in the coverage that are covered. If a business has a great deal of inventory, it is common for them to miss spelling and grammatical errors. If this is the case, they could end up having to pay out for damages that they would not normally have to cover. Likewise, if there is a large gap in coverage, the business could be left responsible for damages that the business never saw coming.
One of the first steps that you should take when filing for an insurance policy is to check the list that you will be using to compare the prices and policies that you are considering. If your comparison is limited to only the prices and the names of the policies, you may find that you are spending unnecessarily. If you have to choose between two similar policies, your business will be at risk because you will not have enough coverage.
Another common mistake made by inexperienced business owners is purchasing an insurance policy without really understanding all of the terms and conditions associated with the coverage. In order to ensure that you do not accidentally purchase too much coverage or too little, make sure that you read the policy carefully before you sign it. Many times, the fine print can surprise you by asserting that the business is financially ruined and therefore unable to pay out any damages.
Being able to see the coverage that you are actually receiving is one of the main business insurance errors and omissions that new business owners make. Most of the time, these types of errors occur because the business owner did not actually understand the coverage that he or she was purchasing. Some people assume that small business insurance companies will cover any losses that occur within their business. While this is true, there are also some companies that will only cover the particular areas that you specifically need covered.
For instance, if your business consists of a bar, restaurant, nightclub, or other types of retail outlets, your insurance policy may include protection for only your equipment. Unfortunately, this means that you could be sued if someone is injured on your property, and you could be responsible for all of the bills. When this happens, you can easily run into the hundreds of dollars per day that you spent on lawsuits. This mistake is even more common when it comes to small business insurance policies meant to protect the assets of sole proprietors. Because the policy will only cover the assets belonging to the business itself, you could be left owing thousands of dollars if you lose your business.
Another common business insurance errors and omissions are failing to take the time to compare different policies. Many people don't realize that different insurance companies offer different rates. You should also fail to compare the price of different policies over the long-term. By doing so, you . . . . . . could easily end up with hundreds of dollars in business insurance premiums that you didn't need to pay.
Even if you have carefully studied and analyzed the needs of your business, you can still be at risk for making costly mistakes. Just because you had the best possible insurance policy in place doesn't mean that you no longer need to make changes to protect your business. In fact, the sooner you start making changes to your business insurance policy, the less likely you are to have to worry about any problems in the future. Therefore, it is always a good idea to look around and ask questions whenever you are shopping around for an insurance policy for your business.
Although you need to be very careful when it comes to business insurance errors and omissions, it doesn't mean that you have to skip basic assessments. For instance, even if you found a solid savings account in your business insurance package, it wouldn't hurt to run a credit check on the account. The truth is, there's a difference between finding something in your package and finding out that you are paying too much for it. When in doubt, it is always better to err on the side of caution than to be caught off guard by unexpected costs later on. By following these basic tips, you can feel confident that you won't be one of those business owners whose business insurance mistakes and omissions cost them money and time down the road.