As a small business owner shopping for a liability insurance policy, you want to ensure you get the coverage you need. However, without an insurance background, it can be hard to know if the small business liability insurance quotes you’re getting are reasonably priced and provide you with truly comprehensive coverage. So, as someone who needs insurance, how can you ensure you’re getting the right small business liability policy to protect your business?
Aside from talking to a trusted insurance advisor, knowing what to avoid in an insurance quote is important. From pricing that’s too good to be true to language that’s so specific it excludes the coverage you need, we’re discussing three common red flags to look for in a small business liability insurance quote.
Owning a business is difficult work, and the expenses can seem unforgiving sometimes, especially if you’re in a slow season or if prices are rising all around. It can be tempting to take the cheapest option, especially if you’re looking at something you may think you’ll never use but have to have, like liability insurance.
When you think about it, is your liability insurance an expense or an investment? While you may not think you’ll ever need it, your liability insurance can prevent unexpected incidents from costing you a lot of money or bankrupting you altogether. Costly incidents are an expense. Your insurance is an investment in the future of your business.
The cheapest option can often be tempting, but that price tag usually hides coverage that won’t cut it when you need it the most. Besides, liability insurance is an investment in the financial health of your business. Paying a little more for security and peace of mind is worth it.
If you’re unsure if the rate you’re being offered is too good to be true or simply a little competitive, shop around with other carriers. While pricing will vary between carriers, your small business liability insurance quotes should be comparable.
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Another thing to watch out for when shopping for liability insurance policies is the policy's language. Language that’s too broad may allow your carrier to find loopholes that exempt them from covering certain incidents, and language that’s too exact can do the same thing, limiting your coverage to situations that occur in specific circumstances.
For example, your liability insurance policy may cover third-party property damages. Say you’re a contractor working on someone’s house, and it burns down. However, what if the house burns down with people in it? If your policy doesn’t specifically cover medical expenses for third parties injured in association with your work, you could be liable for those costs.
CoverHound’s COO, suggests approaching the language of your policy with a “worst-case scenario” lens.
You should also consult with a qualified insurance expert to parse through the language of a liability policy you’re considering. While you may catch a lot yourself, consulting an expert can help you better understand the coverage you’re signing up for. You don’t know what you don’t know, but with the help of an expert, you can go into the insurance buying process fully equipped with the knowledge you need to make an informed decision.
You’ll probably have many liability insurance carriers offering you add-on policies. This isn’t a red flag in and of itself – most small businesses need more than just a liability policy. It is a good idea for most companies to add on a cyber liability policy, for example.
Keep an eye out for insurance carriers offering add-ons that sound too good to be true. If the add-on coverage you’re paying for is so cheap you can’t believe it, it’s likely barely covering you, and you may not be protected as well as you think.
This is another case where you want to carefully examine any policy language with an expert and consider insurance an investment in your business, not an expense. Making a well-thought-out investment that gives you comprehensive coverage for a secure future is worth it.
Pro Tip: Consider exclusions when looking for a policy, too. A lot of exclusions are commonplace, like infectious disease or terrorism exclusions. However, if you know you want specific coverages, you should check your policy with experts like those at CoverHound to make sure those coverages aren’t excluded.
Knowing what to avoid while shopping for a small business liability insurance quote can help you find a quote that provides coverage that will prepare your business for any incident. By staying away from prices that you wish were true, asking detailed questions, and consulting an expert about the language of your policy, and being wary of easy add-ons, you can avoid many future headaches.
CoverHound simplifies comparing quotes across 50+ carriers so you can protect your business quickly and confidently. Navigate the insurance process smoothly with CoverHound’s insurance experts here to help every step of the way. Get your free, customized insurance quote in less than five minutes when you take our online quiz today.
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