This is the third in a series of posts discussing common pitfalls and mistakes that business owners can avoid with forethought. The first rule is to incorporate your business, and the second is to stay alert on tax issues. The third is, likewise, important for businesses of all shapes and sizes—no matter where you operate.
Risk is a Reality in the Business World
Small business owners are a special breed. It takes a pioneering spirit, vision and an entrepreneurial drive to launch a business. It also takes someone with thick skin because the reality is that there are inherent risks in almost every aspect of business—from hiring and managing employees to entering contracts or delivering products.
Every day we hear stories from business owners across the country dealing with serious issues of property loss and or lawsuits. To be sure, you never know when an employee is going to have an accident or when a fire may occur. Indeed, there are many unknowns, including the ever-present possibility of a lawsuit. So, to the extent possible, you want to have insurance to cover yourself.
Don’t be Cheap!
It’s understandable that business owners will look to keep costs down wherever possible; however, its not a good idea to skimp on insurance. That said, you should comparison shop. And it may be a good idea to work with a broker to help you find policy coverage that works best for your business.
You should consider increasing general liability coverage. You may also want to consider adding umbrella coverage, or employment practices liability insurance if possible. Finally, small business owners may be wise to consider business interruption or disability insurance policies.
Read the fine print!
One other pro-tip is that you should take the time to read your insurance contracts before signing. To be sure, if you are spending money on insurance, you want to make sure that it really will cover you. And you want to understand the exclusions—i.e., what is not covered. For that matter, in the event of an accident or lawsuit, you may will to refer to your contract if the insurance company is dragging its feet or refusing to provide a defense.