As a business owner, it's important to be aware of the common mistakes that could lead to insurance issues. These mistakes can not only affect your premiums but also cause you problems down the road if there is ever an accident or theft at your workplace. Here are six common mistakes you should avoid:
Not carrying enough liability coverage
Not having enough liability coverage can lead to issues if you are legally liable for injuries or property damage that occurs at your office. It's common for many small business owners to think they don't need to carry a lot of liability insurance, because their policy might cover any accidents or damages that happen. However, it's important to note that the money from a business insurance policy is unlikely to cover all the legal fees and settlements if you are sued. In most cases, liability coverage needs to be enough so you can buy an additional insurance policy that would cover those expenses.
Failing to update your policy
As your business changes, it's important to be aware of what should be updated on your policy. Some examples include if you have added employees, opened a new location or bought any expensive equipment. It also might be wise to update your liability coverage if you have expanded inventory or services that are more risky/dangerous than what was originally mentioned on your policy. An insurance company will only know that you need to update your plan if you tell them!
Skipping any safety training
Employee safety training is essential to keeping everyone at your business safe. Unfortunately, many small companies don't see the need to invest in safety training for employees. Not having this kind of training may result in injuries that could cost you thousands of dollars if they are serious enough to cause an accident. Additionally, some states require new employees to be trained within 30 days of starting.
Workers comp insurance is required in some states for all employers with employees, but not everyone knows that. Your business may be liable for any injuries your employees receive while at work if you don't have this type of coverage. It's also important to note that workers comp is not based on how many people are on staff; it's dependent merely on whether or not you have employees. If your company has even one employee, you most likely need workers comp insurance.
These are all serious issues that need to be addressed before they become bigger problems. It's best practice for every business owner to keep these potential pitfalls in mind when designing their company's insurance plan and risk management strategy.
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