Estimated Time to Read: 3 minutes
Small business insurance. It’s something you may have been putting off. For most business owners in Alberta, the world of insurance feels tricky and expensive. Today you will learn that it is more than manageable, and very affordable – but only if you don’t make these common mistakes.
Mistakes to Avoid When Purchasing Small Business Insurance
Your small business needs insurance, whether you are running a brick-and-mortar SME (en.wikipedia.org/wiki/Small_and_medium-sized_enterprises) with a small group of employees, or whether you are the sole owner, operator and employee of a home-based business. No matter the size and type of your company, you need to avoid these mistakes when purchasing small business insurance in Alberta:
- Not Taking Your Time
Small business insurance is not like life insurance that you can get in a matter of minutes over the Internet or phone. Your business needs to be carefully analyzed and all the risks of your company assessed. You don’t want to be under or over insured. For example, a package deal may include fleet insurance, but what if you don’t have a fleet? Find the insurance that can be customized to meet the needs of your company, and a broker or agent that takes the time to understand those needs.
- Ignoring your Liability
No matter how many precautions you take, you are going to make a mistake. It’s natural and only human. Your professional mistakes make you open to liability. Protect yourself with liability insurance. One form of this is errors and omissions insurance, a must for consultants that tell clients important information about their finances, products or life choices. Product liability protects you if your product harms someone. For example, if a toy you manufacture turns out to be a choking hazard and a child is harmed.
- Assuming you Have Coverage when you Don’t
Umbrella companies under which you become a franchisee don’t always cover you under their policies. Just ask the many Uber drivers that learned that lesson the hard way. When you partner with an MLM (www.investopedia.com/terms/m/multi-level-marketing.asp); or sign up with an app-driven service company like Skip the Dishes, Uber or Airbnb, be very sure you understand what the parent company covers in terms of liability, products and fleet insurance – and what it does not. Not being aware of what insurance components you needed to get on your own is not an excusable defense if the courtroom.
- Not Telling your Home Insurance Carrier about your Business
Home-based businesses must be disclosed to your home insurance carrier. They need to have a discussion with you about what is covered under your home policy, and what is not. The last thing you want after making a claim due to theft, fire or flood is to find out your inventory in your basement was not covered, or the laptop you used exclusively for work is excluded from your contents insurance. Situations for home based businesses vary, so have a conversation with your carrier without delay.
The Biggest Mistake? Procrastination
The worst thing you can be when you have a small business is to be uninsured due to your own negligence and procrastination. Why would you put all the effort into your small business to get it up and running, only to leave it – and yourself – vulnerable and unprotected? You may procrastinate thinking you have time before disaster strikes, but disasters don’t procrastinate at all. You are always one bad day away from ruin when you neglect to set up insurance for your small business.
Your business is a part of your life and your future. Avoid these costly mistakes so you can embark on your career with confidence.