Three Costly Mistakes When Buying Insurance Direct
Buying business insurance is pretty easy…right? Not necessarily. Today, insurers are trying to make it seem like purchasing insurance is incredibly simple that you wouldn’t think twice. In reality, this can put your business in a difficult position for the sake of convenience. That’s why you need to avoid these three mistakes when buying insurance directly from the insurer.
Buying Insurance Direct Mistake #1 – Not getting the right insurance
Almost every type of business needs insurance. But how do you know what insurance you need? It can be tricky navigating around all of the various types of insurance out there. In fact, some industry bodies make insurance a mandatory requirement for its members.
The actual cost of not having the right insurance can be astronomical. Here are two reasons why:
1) You’ll waste money by having the wrong cover
2) You’ll have a false sense of security that you’re covered
It’s commonplace for many small business owners to seek advice about business insurance. Before listening to any advice, do your research. The best place to start is to go to the Australian Government’s business.gov.au website. Here, you’ll find some great tips about the various types of business insurance out in the market. We also recommend that you speak to an insurance broker who has the experience to understand your business and the risks you face.
If you’re looking for extra convenience, we launched a handy online quiz that can determine the types of insurance you may need without having to contact a broker.
Like any advice, we remind you that you should always speak to a professional regarding your insurance needs and do your research to avoid these mistakes when buying direct insurance.
Buying Insurance Direct Mistake #2 – Underinsuring your business
Approximately 70-80% of Australian businesses are underinsured. The biggest mistake with underinsurance is paying significant out-of-pocket expenses for damages that you didn’t have insurance cover for.
There are many reasons why small business owners find themselves underinsured. One reason is that they didn’t accurately estimate the coverage required for their business. Another reason is that the business owner has reduced the coverage amount to help lower their premiums.
Concerned about your business insurance? Speak to an insurance broker today.
It’s a part of the broker job to make sure your coverage amount is correct and accurate. But for many who buy their insurance direct, more often than not, they are underinsuring their business to save money on their premium. This particular method can be disastrous; which is why we wrote a guide that explains what factors can affect your premiums. There are also ways to avoid underinsurance to safeguard your future by avoiding these mistakes when buying direct insurance.
Buying Insurance Direct Mistake #3 – Not having comprehensive cover
Less can sometimes be best, but not when it comes to insurance. Now, that doesn’t mean you need every type of insurance.
With comprehensive business insurance, it can cover you for a wide range of damages. In comparison, basic insurance cover may not be adequate to help you protect you from possible risks. Some may argue that they only need basic cover because it’s the only requirement in their industry. But this leaves you exposed to unknown events that could potentially destroy your business.
An excellent solution for many small businesses is a business insurance package. A business insurance package is a group of insurance policies, bundled together to fit the business’ needs. It combines a range of insurance policies, such as business interruption, public liability, cyber liability, property, and theft, so that your business if prepared.
To get a tailored business insurance package, speak to a business insurance broker who will assess your risks and recommend what types of insurance you may need.
An insurance broker is there to guide you towards the best business protection strategies
What should you do next?
Unless you are confident knowing the ins-and-outs of insurance, we recommend that you speak to a broker. Here at Macey Insurance Brokers, we’ve helped Aussie businesses for over 40 years. Our team of professionals understands a wide range of industries, from the smallest of sole traders to the largest of corporations.
We’re here to help you because your risks are our risks, and we won’t rest until you’re protected.
This article originally appeared on Macey Insurance Brokers Blog and has been published here with permission.
Advisr does not provide advice and does not hold a financial service license (AFSL). All information above has been provided by Casey Stewart.