Taking out Business Insurance: 6 Mistakes to Avoid!

Due to the risks present in everyday life and the need to minimize their consequences, many companies decide to take out insurance . This is an important measure, which can minimize losses in small eventualities or guarantee the necessary resources for a business to recover in the event of a serious accident.

However, a measure that should bring tranquility and security precisely in moments of vulnerability can, in fact, be a source of problems and concerns.

This happens when the organization discovers that it did not have coverage for that type of claim or the insurer’s service leaves a lot to be desired. Therefore, it is essential to pay attention to some basic precautions to avoid errors in assessing the necessary coverage or the company providing the service itself.

Do you want to know what these errors are? Then follow this post. In it, we will tell you what you should avoid to ensure the coverage and protection your company needs.

See 6 mistakes to avoid when taking out Business Insurance:

1. Excessive focus on low cost

Insurance is not a mere obligation and, therefore, the manager needs to keep in mind that it is essential to guarantee the protection of the business’s interests . Cheap insurance may seem great in the short term, but generate a huge loss in the event of an accident.

There are basically two ways to “cheaper” insurance: opt for a limited coverage contract or turn to companies that sell the same product as their competitors at a reduced price.

However, in both cases, this alternative can cause many problems. The absence of important coverage leaves your company vulnerable to risks that are very common in your line of business, location or other factors.

On the other hand, choosing an insurance company solely based on price can also generate numerous problems: the contract may be inappropriate for your profile or lack the structure for service, resulting in losses in the event of an accident.

2. Not evaluating references from other clients

When talking about a proposal, the service and level of service promised is not always clear. Even if the contract provides for immediate procedures and quick deadlines for assistance in the event of an eventuality, current customers are the ones who know whether these conditions are actually met.

Therefore, before concluding a contract, try to look for references and look for information from other clients. They are able to tell if they had a good experience or if the insurance company has failed in its service to policyholders.

3. Paying for unnecessary coverage

The perfect insurance is not one that contains a huge list of coverages. In fact, the best contract is precisely the one tailored to your needs: which covers all the risks to which your business is exposed, without making you pay for situations that are completely unlikely for your activity.

Therefore, be careful with unnecessary coverage. Hiring a protection or service that will never be used remains a waste.


4. Take out insurance directly from the bank

The bank has a single interest: selling its own product, which in this case is insurance. Therefore, the role of the exclusive broker or agency manager is to convince you that that policy meets your company’s needs.

The role of a specialized broker is completely different. These consultants usually work in partnership with several insurance companies and, therefore, they can study your needs and identify, among many options, the most appropriate ones to meet your case, maintaining an excellent cost-benefit ratio.

Furthermore, while bank managers do not specialize in insurance but in financial products, the same is not true of brokers. These professionals specialize in the field and can provide all the advice your company needs before and after purchasing the product, including resolving doubts and providing guidance in the event of an accident.

5. Not keeping coverage up to date

Your business has its own dynamism, the value of stocks fluctuate, sales grow, new addresses, new suppliers and contracts, in short, all of this will need to be included in the insurance contracted for the entire duration.

The insurance needs to be “alive” like your company, after all it is valid for one year. Be careful, then, to share information with your broker about changes in your company and receive instructions from him on how to keep the set of coverages contracted up to date.

6. Not counting on specialized advice, from the broker or the insurance company

Basically, always consider when taking out insurance: your needs and the insurer’s ability to fully meet them.

By considering the company’s needs, you will establish which coverages are essential and cannot be left out of your policy. To do this, you need to identify the risks that are really part of the operation of your business and ensure insurance that covers these eventualities.

However, even if the risks have been properly identified and the policy covers them satisfactorily, the entrepreneur needs to analyze another factor — the insurance company. How does it serve its policyholders? What are the procedures when it comes to obtaining the desired return? How does it behave at a time when the company is vulnerable? These are very important aspects.

Therefore, although you should seek recommendations and listen to other clients, specialized consultancy is the best alternative to reconcile these two points and obtain a truly advantageous contract.

In their portfolio, specialized brokers have a wide variety of insurance products and insurers. Therefore, they are able to show the options most suited to your business profile, ensuring that your company only pays for the coverage it really needs and places its trust in services recognized for their credibility.

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