Top Insurance Mistakes Small Businesses Make—and How to Avoid Them
- Holly Reif
- Jan 17
- 2 min read
Updated: Aug 7
Running a small business comes with many responsibilities, including protecting your company from potential risks. Unfortunately, navigating business insurance can be tricky, and mistakes often lead to costly consequences. Here are the top insurance mistakes small businesses make and how to avoid them:
1. Underestimating Coverage Needs Purchasing minimal coverage may save money initially but can leave you underinsured. When a claim occurs, you could be out thousands of dollars.
2. Skipping General Liability Insurance Even low-risk businesses need protection from third-party claims involving property damage or bodily injury. In our litigious society, you can be sued for any reason, and defending the suit is expensive. General liability insurance covers legal fees, defense costs, and damages, making it a must-have.
3. Ignoring Business Interruption Insurance Imagine the costs your business would incur to restart operations after a disaster. What about your lost income? Business Interruption Insurance covers the lost income and extra expenses when a business cannot operate normally due to a covered loss.
4. Overlooking Cyber Insurance Small businesses are prime targets for cyberattacks. Cyber criminals prey on firms with lax security measures, and, too often, small businesses fail to protect their systems. Cyber insurance helps cover breach-related costs, protecting both finances and reputation.
5. Relying on Homeowner’s Insurance for Home-Based Businesses Most homeowners’ policies don’t cover business-related losses. Business assets such as inventory, raw material, and computer systems are not covered by home insurance policies. Trip-and-falls from customers visiting the home are also not covered by a home policy. A tailored home-based business policy ensures proper protection.
Ready to safeguard your small business? Contact us today for personalized guidance and reliable coverage options that will help you avoid costly mistakes and keep your business protected.
Holly Reif is a commercial lines Account Manager at Knight Insurance Group. She has been working in the insurance industry for over 10 years.
