5 Common Commercial Insurance Mistakes to Avoid
Preparing a comprehensive insurance portfolio for a business can be difficult, even for the most experienced commercial insurance agent. While the agent has the duty to do his best for you, he can only work with the information you give him. It is incredibly important for you to be as detailed as possible when answering questions about your business. Doing so will help you and your agent to avoid these 5 common mistakes.
Incorrect Named Insured
The named insured on your policy represents the entity that is covered by the policy. The problem is that many business owners only tell their insurance agents about their main entity and fail to give them their sub-entity or doing-business-as names. All of the entities you need to have covered need to be listed on your policy. Not doing so may void coverage if part of your business is involved in a claim but isn’t listed. This means you may end up having to pay for damages out of your own pocket.
Incorrect Property Coverage
Commercial property coverage only applies to the properties listed on your insurance policy. Period. End of statement. Your properties need to be listed no only on your commercial property policy, but on your general liability policy as well. Even vacant properties need to be listed on your general liability policy, as someone could still be injured on the land or in the empty building.
Properties with buildings and contents need to have coverage limits that are adequate enough to cover your building, personal property, and business income if there is a major incident. Talk to your insurance agent to make sure your limits are high enough to cover all of your needs.
Adjusting Your Deductibles
Talk to your commercial insurance agent about increasing your deductibles, especially for things like property damage and automobile insurance coverage. A low deductible means you’ll pay very little out of pocket but it will also increase your premiums. A higher deductible means you’ll pay more out of pocket but your premiums will remain lower. Weigh the odds of an actual insurance-worthy claim occurring and consider whether or not you need to spend the extra money.
Over-shopping
The commercial insurance market is competitive, for sure. While there are dozens of agents to deal with, there are only so many insurance companies willing to write the type of coverage you need for your business. Approaching 10 different insurance agents will prove a waste of time as each will attempt to contact the same carriers on your behalf and only the ones who get there first will get the quotes. Ask the agents you are dealing with what companies they will approach and consider narrowing the list of agents so that you get a better mix of possibilities.
Not Negotiating
You can’t really negotiate your personal insurance costs but your commercial insurance costs are negotiable. Insurance companies want your business, especially if you have not had any or many claims. They’ll work with your agent to find a price range that is within your budget. If not, consider talking to a different agent.
Paying attention to your policy and your shopping methods can make a huge difference in your bottom line. Don’t let your commercial insurance become a headache. Find a great agent and work with him closely to ensure you get all that you and your business deserve.
