As far as commercial business insurance is concerned, it is always wise to check that you have coverage for everything necessary. If you fail to do this before purchasing a policy, you could be in for an expensive surprise at a later date — or even destroy your business if you are really unlucky. Of course, nobody enjoys the tedious task of reading through the small print on insurance contracts. Nonetheless, this is time well spent, because your understanding of the small print could save you a fortune. Never take the word of your neighbor, best friend or relative about what is and what isn’t covered by commercial business insurance. In all likelihood, they have not read the small print on their policies either.
In the business world, there is no substitute for knowledge, so to gain an advantage over your competitors, you ought to study the small print closely. According to Smart Business Insurance, here are five of the most significant details you will frequently see in the small print of commercial business insurance policies. Being aware of these details will give you an edge over the majority of policyholders, who have no knowledge of them whatsoever.
1) It can Cost you Less to use Multiple Providers
There’s a good chance that, when you received insurance quotes in the past, you were talked into purchasing other policies as well. Sometimes, using one provider for all your insurance needs will save you cash. However, you should do your homework beforehand because this is not necessarily the case. Insurers are well aware that, after you sign up for a policy, you are likely to buy other policies you require (or occasionally, policies you don’t require). Although it is handy to have a single bill with all your policies listed, is not always the best option financially. Doing so will not guarantee the best coverage, or the lowest rates in many instances. Therefore, when you begin looking for commercial business insurance, consider the cost of individual policies too.
2) There are Usually Exclusions That Apply
Commercial business insurance policies that are labeled ‘comprehensive’ do not always live up to their billing. If your claim does not fall under the category of property damage or bodily injury arising from negligence, it might be rejected. If your insurer discovers that you failed to exercise due care when constructing a custom sofa, then it collapsed and injured the owner, you might not be protected. The small print of your insurance policy will specify whether shoddy workmanship is classed as an exclusion.
3) Vehicles That Don’t Belong to you are not Always Covered
Commercial vehicle insurance does not usually cover rented vehicles, or other vehicles that don’t belong to you, if you are involved in a collision. You might see nothing wrong with taking an international business trip without rental insurance, however this is a big unnecessary risk. If you supplement your policy with an endorsement, you can get cover for hired and non-owned vehicles. If a staff member crashes his car while carrying out business duties and you are sued afterwards, you will be covered in most cases.
4) Worldwide Cover is not Always Included
If you have to visit Hong Kong on business, be mindful that your commercial business insurance policy is unlikely to come along for the ride. Although homeowner liability insurance usually travels well, business insurance is less mobile — to the detriment of many entrepreneurs. Typically, the areas covered include America, Canada and other territories in the US. If your business involves you having to travel abroad regularly, consider amending your policy to include a worldwide endorsement. This will give you coverage, wherever you are in the world.
5) Flooding is not Always Covered
This is a common mistake among business owners, many of whom have lost everything after watching flood insurance adverts broadcast in the mainstream media. As a general rule, no type of property insurance covers flooding. Instead, this must be bought through the NFIP (National Flood Insurance Programs). Regrettably, business owners are often unaware of this and end up paying the price. Following Hurricane Katrina and Hurricane Sandy more recently, some businesses had no cover whatsoever – and were forced to close due to the high cost of resuming operations. Although half of all businesses fail according to the SBA (Small Business Association) http://www.sba.gov/sites/default/files/sbfaq.pdf, this is one reason for failure that you can avoid with the right knowledge.
Hopefully, the above information has inspired you to do your due diligence, before arranging commercial business insurance. Do not sign up to the first policy you find, just to save time. Although insurance agents can be helpful, you are in charge of your business and understand it more than anybody. Therefore, safeguarding it ought to be your primary goal, and knowing your policy details is a keyway of avoiding future disaster.