Five Insurance Mistakes Small Businesses Make

With enough legwork, you can build a successful small business. But, success requires a lot of planning.

Before establishing an insurance plan, you should be aware of the pitfalls. Consider the five biggest mistakes small business owners make. We can help you avoid them before they’re too much to handle.

One: Not Covering Loss-of-Income

Don’t settle only for general liability and property insurance. You need to cover your loss-of-income, because not doing so can cost you dollars in the long run. If your business shuts down, or if it suffers a setback, you’ll need fiscal coverage to make sure you’re protected.

Fortunately, you often don’t need to buy a separate policy. You can often add a rider to your business owner’s policy or property insurance policy. Confirm that your basic policy covers disasters, and make sure your income losses are well-defined.

Two: Not Covering Disability

Disability is a huge factor, and it’s the reason business owners wind up without any income. Get a disability coverage policy in place as soon as possible, and make sure you’re covered. Some policies may only cover you for a number of years, while others offer coverage long-term.

If you’re able to, make sure you clarify how much of your income has coverage. Any bonuses and commissions should have coverage.

Three: Classifying Independent Contractors as Employees

You might use independent contractors to secure low-cost work or specialized labor. However, you shouldn’t classify them as employees. If you do, the IRS can audit your business. On the flip side, you should avoid classifying employees as independent contractors. In doing so, you’ll spend unnecessary money.

Four: Not Updating Your Plans

Once you have several plans in place, make sure you’re updating them as needed. Also, update them if you hire new employees, move to a new location, offer new service or have invested in commercial real estate.

Five: Paying Too Much

Make sure you’re getting the best deal possible. The business insurance industry changes, and it changes often.

Make sure you’re up to date on current prices, and stay competitive. Over time, you’ll secure the best insurance rate possible. Stay informed, check for updates whenever possible and make sure you’re saving as much as you can. Your insurance agent can be a valuable asset in helping you search for coverage.

We've got you covered. Call Affiliated Agency at 516-576-0166 for a fast, free business insurance quote.