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When Evaluating Business Insurance Needs

Avoid Making 5 Common Mistakes as you look over your business insurance needs and premiums each year. You may wonder how you can save a few dollars on your next premium commitment. You can get started with rock solid information for business health insurance and a term life insurance quote from various companies.
Insurance is an intangible asset. Therefore, placing a value on it can be very difficult until – something goes wrong and you need to make a claim. Insurance specialists from the best firms highlight the five most common mistakes that business owners make when evaluating their insurance needs:

I. Not Understanding Your Full Risk Profile

When reviewing your business insurance needs, it’s essential to determine:

1. Events that could occur in your business that would create adverse impact.
2. What adversity would have the biggest business impact – in terms of dollars.
3. How to ensure that you are adequately covered against these risks.

An adverse impact can be caused by sickness, disability, accidents, theft, death, acts of God, etc. – all of which can be offset by some type of insurance. (A list of resources is at the end of this article.)

Often policy holders will eliminate one feature of a policy by assuming that they can save money. Typically, they will purchase theft, fire and glass coverage, but not take out burglary even though it’s a relatively minor additional fee.
You’ll agree – Murphy’s Law dictates that the one thing you leave out is the one thing you’ll need to claim against your insurance. And it can be for one of the most unlikely items. The strangest story I’ve heard of is a diner that was robbed of all its frozen hamburger and sausage patties. Although it was never proven, it was suspected that a new competitor diner, just around the corner, decided that they would eliminate some start up costs by obtaining a freezer full of free products!

II. Being “Cheap” Regarding Your Premium Payments

Don’t get “hung out to dry” by trying to save yourself a few hundred dollars on your insurance premium to the detriment of being fully insured. Being cheap now could end up costing you thousands of dollars somewhere down the road.

III. Insuring Assets at Depreciated Value Instead of Replacement Value.

It is essential that you insure your assets for REPLACEMENT value. In other words, how much would it cost you to repurchase the items insured if you had to pay the full price. A common mistake, particularly when purchasing an existing business, is to insure the assets at the depreciated value, rather than the replacement cost.

IV. Not Fully Disclosing Everything!

Some people don’t believe it, but … if you don’t disclose everything upfront when you sign your application for an insurance policy, the insurance company is quite within their rights to not pay your claim. Worse still, they won’t even refund your premium paid to date. Therefore, don’t hold back. Disclose anything relevant to your insurance upfront to save drama and devastating loss at a later date.

V. Not Listening to Your Insurance Broker

Your insurance broker is the best person to advise you about insurance coverage. Having seen many businesses that are similar to yours, they have seen those business owners go through the pain that you don’t need to suffer. Your insurance broker will know what works for your type of business and how to get it for the cheapest possible price. As an insurance agent, they know the ropes and can maneuver you through the subtleties in insurance policies which will save you dollars in the long term.

However, it is wise to consider online research before sitting down with your local advisor so you can better compare insurance benefits, rates and quotes for:
Insurance is an invisible shield that protects you and your family. You can’t see it, but you will certainly feel the consequences in the event of loss, whether you are with or without it!

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