The Top 5 Insurance Mistakes Small Business Owners Make – Avoid These Common Pitfalls to Protect Your Business

As a small business owner, you’ve poured time, money, and effort into building something valuable. But even the most passionate entrepreneurs can leave their businesses vulnerable by making critical mistakes when it comes to insurance. Below are five common missteps—and how to avoid them.

1. Being Underinsured

Many small business owners opt for the bare minimum to save money, not realizing it could cost them much more in the long run. Whether it’s commercial property, equipment, or inventory, being underinsured can leave you exposed in the event of a fire, theft, or natural disaster.

Tip: Review your coverage annually to ensure your policy reflects the current value of your assets.

2. Skipping Liability Insurance

Think you don’t need liability coverage because you’re a small operation? Think again. One unexpected claim—whether it’s a customer slipping in your store or a client accusing you of negligence—can lead to a costly lawsuit.

Tip: General liability insurance is a must-have for almost every business, no matter the size or industry.

3. Forgetting About Cyber Coverage

Cyberattacks aren’t just a big-business problem. In fact, small businesses are often targeted because they tend to have weaker security systems. If your business stores customer information, processes payments, or relies on digital tools, you’re at risk.

Tip: Talk to your broker about adding cyber liability insurance to your policy.

4. Not Updating Your Policy as You Grow

A growing business is a good thing—but expansion often means new risks. Hiring staff, moving locations, or offering new services may all require policy updates.

Tip: Inform your broker of any significant changes to your operations so your coverage stays in step with your growth.

5. Not Working with a Broker

Buying insurance online might seem convenient, but it can lead to gaps in coverage or paying for protection you don’t need. A broker understands your business and can help you build a policy tailored to your needs.

Tip: Build a relationship with a local broker who can help you make informed decisions and keep your coverage current.

Protect What You’ve Built

Your insurance policy isn’t just a formality—it’s a safeguard for everything you’ve worked hard to create. If you’re unsure whether your business is properly protected, we’re here to help. Contact us today for a free review of your current coverage.