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 that can minimize losses in small eventualities or guarantee the resources necessary for a business to recover in the event of a serious loss.

However, a measure that should bring peace of mind 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 insurance company’s service leaves much 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.

Want to know what these mistakes 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 ensure the protection of the business’s interests . Cheap insurance may seem great in the short term, but it can generate huge losses 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 bring many problems. The lack 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 based solely on price can also generate numerous problems: the contract may be unsuitable for your profile or lack the structure to provide service, generating losses in the event of a claim.

2. Not evaluating other customers’ references

When it comes to proposals, the level of service promised is not always clear. Even if the contract provides for immediate procedures and quick deadlines for service in the event of an eventuality, the only people who know whether these conditions are actually met are the current customers.

Therefore, before signing a contract, try to seek references and information from other customers. They will be able to tell you whether they had a good experience or whether the insurance company has flaws in its service to policyholders.

3. Paying for unnecessary coverage

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

4. Take out insurance directly from the bank

The bank has only one interest: to sell its own product, which in this case is insurance. Therefore, the role of the exclusive broker or branch manager is to convince you that the 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 are not specialized in insurance, but in financial products, the same is not true for brokers. These professionals have specialized in the field and can provide all the advice your company needs before and after purchasing the product, including resolving queries and providing guidance in the event of a claim.

5. Not keeping coverage up to date

Your business has its own dynamism, stock values ​​fluctuate, sales grow, new addresses, new suppliers and contracts, in short, all of this will need to be covered by the insurance contracted throughout the term.

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

6. Not having specialized advice from the broker and the insurance company

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

When considering your 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 actually part of your business’s operations and ensure insurance that covers these eventualities.

However, even if the risks have been properly identified and the policy covers them satisfactorily, the businessperson needs to analyze another factor — the insurance company. How does it serve its policyholders? What are its procedures when it comes to obtaining the desired return? How does it behave when the company is vulnerable? These are extremely important aspects.
Therefore, although you should seek recommendations and listen to other clients, specialized consulting 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 insurance companies. Therefore, they can show you the options that best suit 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.