Common Mistakes to Avoid When Buying Business Insurance

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Common Mistakes to Avoid When Buying Business Insurance

Running a small business might feel like walking through a minefield. There are so many potential mistakes and missteps at every turn, and even when you take steps to avoid them, you might wind up in trouble.

This is often true when small business owners buy business insurance. There are many insurance mistakes that could cause you grief down the track. This article covers some of the most common business coverage blunders and some tips on how to shop for business insurance.

1. Choosing the cheapest option

Let’s face it—thinking about business insurance is probably the last thing you want to do. It might be tempting to pick the cheapest option you find and move on to the next item on your list (especially if your budget is tight).

But, this might not be the best way to protect your business. The least expensive option may not include important coverages that your business might need, or it provides too little cover to properly protect you.

Carefully comparing policies when you buy business insurance could help you find cover that works for your small business. Luckily, BizCover makes this process easy, and you might even save money whilst doing it!

2. Not reading the policy wording

Speaking of comparing policies… Reviewing policy wordings is part of weighing to pros and cons of different insurance options. A policy wording is the terms and conditions of a policy. It outlines exactly when you are covered and when you are not.

Skipping the policy wording is an insurance mistake that a lot of business owners make. These documents are often long and hard to understand, but you’ll probably want to make an effort. If you assume you are covered for an event, it could come as a nasty shock to later learn that you’re not!

Reading the policy wording can help you compare your insurance options and understand exactly what you are covered for. Unsure what something in the policy wording means? Our customer support team may be able to help you out.

3. Forgetting to cover common risks

Have you thought about all the risks your small business might face? A common business insurance mistake is missing potential hazards that might end up costing you an arm and a leg.

Every small business is unique, and the risks you face might be different from other businesses in your area (even ones in the same industry as you). Making a list of the ones that might affect you—from customer injuries and business interruptions to computer viruses and broken equipment—could help you decide which policies you might need.

BizCover offers many types of cover to help protect Australia’s small businesses beyond common coverage options, like Public Liability and Professional Indemnity. Business Insurance, Cyber Liability, and other types of cover might also suit your business needs.

4. Sticking with the same cover for too long

You’ve covered your business—done and dusted, right? Maybe not. Your small business might not be so small in a few years, or maybe it’s grown since you bought your first policy. It may be time to review your coverage.

Think about how much your business has changed since you opened your doors or took on your first client. Are you more profitable? Do you have more employees? Have you upgraded your equipment? It’s possible that your current insurance policies no longer provide enough coverage for your business.

Keeping the same insurance policy only works if nothing about your business has changed. It may be worth your time to review your policy at renewal time to ensure you have enough protection.

5. Not getting covered at all

Like many small businesses, you probably take steps to avoid mishaps and mistakes. You always cross your Is and dot your Ts, whether you’re filling out paperwork or cleaning up a worksite. Since you’re so careful, you might think that business insurance is an unnecessary expense.

In a perfect world, you’d never need insurance. But we all know the world is far from perfect! Accidents happen, equipment breaks down, wild weather trashes your shop… there are probably a million ways that things could go wrong despite your best efforts.

Skipping business insurance might be the biggest insurance mistake that you can make. Without the cover those different policies provide, you could be out-of-pocket for legal fees, compensation, repairs and other expenses. These could be crippling, quickly draining your business accounts (and possibly your personal ones too).

Business Insurance Tips for Australian businesses

Now that you understand some common insurance errors, you might be wondering how to avoid business insurance mistakes like these and others. As you shop for coverage, you might want to keep these questions to ask about business insurance in mind:

  • What types of coverage are required by law for my business, if any? Do I have any business partners or contracts that require certain types of coverage (such as a commercial lease)?
  • What are the common risks for businesses like mine? What risks are unique to how I work or do business?
  • Do my current policies still fit my insurance needs? How has my business changed since I bought the policy?

Answering these questions could help as you compare different types of insurance coverage for your small business.

Though it may take time, carefully considering your insurance options may be well worth the effort. If you ever need to make a claim, you’ll be glad you took your time and avoided these business insurance mistakes!

Ready to compare business coverage options? BizCover takes the drama out of finding and buying small business insurance. Get multiple quotes from some of Australia’s top insurers and get covered in minutes—no dramas! Start today.

*This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording.
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