When you start your own business, it’s important to purchase insurance coverage to protect your investment. Watch out for these common mistakes that could lead to costly consequences down the line.

1) Purchasing separate policies.

Instead of buying separate insurance policies for each component of your business, it is usually more cost-effective to purchase a Business Owner’s Policy. These are packages of policies that can include property insurance, business interruption insurance, liability insurance, crime insurance, vehicle insurance, and/or flood insurance.

2) Not including business interruption insurance.

Business interruption insurance (also known as loss-of-income coverage) is critical for ensuring your continued income in the event of a loss that causes your company to shut down. This insurance can help cover the costs of relocating your business, paying your employees’ salaries, and/or paying rent while your property is repaired. Make sure you include this coverage as part of your Business Owner’s Insurance.

3) Paying too much.

In addition to shopping around for the best possible premium, it’s important to revisit your Business Owner’s Policy each year and evaluate what coverage is still needed. As your business grows and evolves, you may no longer need components of your Business Owner’s Policy that are costing you money each year.

4) Paying too little.

While it’s important to find a good price for your Business Owner’s Policy, don’t just take the cheapest option. If you do, you could find yourself with a policy that doesn’t include important protections for your business, such as business interruption coverage that covers relocation.

5) Being underinsured.

As a business owner, you can decide what coverage you would like included in your Business Owner’s Policy. However, don’t fail to include important coverage – such as liability insurance – just to save money. This could be more costly in the long run because you would have to pay for personal injury or property damage claims yourself in the event that you are sued.

6) Not reading the fine print.

Additionally, some insurance policies have coinsurance clauses that could lead to your insurance company only covering part of your damages if they determine you were underinsured. To prevent this, include “agreed value” coverage in your policy that states a mutually agreed upon level of insurance coverage.

7) Not protecting an online business.

Online businesses have their own set of risks, such as data loss, identity theft, and interruption of service. Although a typical Business Owner’s Policy may cover some components of an online business, it’s important to have a policy that protects you from the unique risks associated with running an online business.

If you’re claim under a Business Owner’s Policy has been denied, contact ClaimCounsel to see if we can help get the benefits you were promised.

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