Setting up insurance for your business isn’t just a checkbox, it’s a key part of protecting everything you’ve worked hard to build. Whether you're launching a new business or reviewing your current policies, the right coverage helps protect your business from financial loss, liability issues, and costly interruptions.
But here’s the thing: business insurance can be complex, and it’s easy to make mistakes that leave you underinsured or without the right coverage. Below, we walk through seven common business insurance setup mistakes, and how to avoid them.
1. Assuming general liability coverage is all you need
General liability insurance is a start, but it doesn’t cover everything. It typically protects against third-party injuries or property damage, but it won’t help if your employee gets hurt on the job, your equipment is stolen, or your business experiences a cyberattack. For full protection, you may need additional policies like workers’ comp, commercial property, or cyber liability coverage.
2. Not updating coverage as you grow
Your business needs probably aren’t the same now as they were when you were just getting started. That’s why it’s important to update your policies when expanding locations, adding services, or hiring more staff, for example. If not, you could end up with gaps in coverage. Make it a habit to review your insurance annually or whenever a major change happens.
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3. Choosing the cheapest policy
Budgets matter. But going for the lowest premium can sometimes mean limited protection and high deductibles. In the long run, a cheap, bare bones policy may cost more if you have to pay out-of-pocket during a claim. Instead, focus on what’s covered, what’s not, and how well the policy fits your risks.
4. Overlooking business interruption coverage
A fire, flood, or major equipment failure could shut your doors for weeks. Without business interruption insurance, you’d be left to cover lost income and fixed expenses on your own. Yet many businesses don’t include this in their coverage. Business interruption coverage can help pay the bills when you can’t operate, and help you get back on track quicker.
5. Not understanding your deductibles (and limits)
It’s easy to focus on what a policy covers and overlook the deductibles and coverage limits. But these details matter. A low limit could mean you’re still responsible for thousands in damages. And if your deductible is too high, a smaller claim might not be worth filing. Be sure your limits reflect the real value of your business assets.
6. Skipping cyber insurance
Cyber-attacks are on the rise. Today, even small businesses are targets for data breaches, phishing attacks, and ransomware. If you store customer information or process online payments cyber insurance is essential. It can help cover legal costs, recovery expenses, and even handle customer notifications after a breach.
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7. Trying to DIY your insurance decisions
Insurance isn’t one-size-fits-all. Working with a knowledgeable agent can make a big difference in identifying risks and making sure you’re not paying for coverage you don’t need, or missing coverage you do.
Protect your business with the right insurance
At Roehr Insurance, we help business owners understand their options and build insurance plans tailored to their operations. Whether you're launching a startup, expanding, or just want a second look at your current policy, our team is here to guide you.
