At Baldersons Insurance, we’ve seen too many businesses fall into the same costly traps when it comes to their insurance coverage. While business owners are often busy focusing on growth and operations, overlooking critical aspects of insurance can leave them exposed to financial risks. Here are some of the biggest mistakes businesses make with their insurance—and how you can avoid them.
1. Underinsuring Your Business
Many businesses try to cut costs by opting for the minimum required coverage, but this can be a costly mistake. If disaster strikes and your coverage isn’t sufficient, you may find yourself paying out of pocket for damages or losses that exceed your policy limits.
How to Avoid It: Work with an insurance expert who understands your industry’s specific risks and can help you assess the true value of your assets and liabilities. Make sure you have adequate coverage to protect your business fully.
2. Ignoring Business Interruption Insurance
If an unexpected event—such as a fire, flood, or cyberattack—forces your business to shut down temporarily, the loss of income could be devastating. Business interruption insurance is often overlooked, but it provides essential financial support during downtime.
How to Avoid It: Consider the impact of a temporary closure on your business and ensure you have coverage to sustain operations while you recover.
3. Failing to Regularly Update Your Policy
Your business isn’t static—it grows, evolves, and changes over time. Unfortunately, many business owners fail to update their insurance policies to reflect these changes, leaving them underinsured or with gaps in their coverage.
How to Avoid It: Review your policy at least once a year or whenever significant changes occur—such as hiring more staff, expanding your premises, or adding new services—to ensure your coverage remains relevant.
4. Overlooking Cyber Insurance
With cybercrime on the rise in 2025, businesses of all sizes are at risk. A data breach or ransomware attack can have devastating consequences, including financial losses and reputational damage. Yet, many businesses still assume they don’t need cyber insurance.
How to Avoid It: If your business stores customer data, processes payments, or relies on digital operations, cyber insurance is a must. It helps cover the costs of data recovery, legal fees, and customer notifications in case of a breach.
5. Choosing Price Over Value
While it’s tempting to choose the cheapest policy, doing so can leave you with inadequate coverage, high excess fees, and poor claims support. The cheapest policy often excludes critical protections, leaving your business vulnerable.
How to Avoid It: Instead of focusing solely on price, evaluate the overall value of your policy. Look at coverage limits, exclusions, customer service reputation, and claims handling.
6. Not Understanding Policy Exclusions
Many businesses assume they’re covered for all risks, only to discover exclusions when it’s too late. Common exclusions can include flood damage, employee theft, or certain types of liability claims.
How to Avoid It: Read the fine print and ask your insurer to clarify any exclusions. If you need additional coverage, discuss endorsements or add-ons that can close any gaps in your policy.
7. Failing to Work with an Insurance Expert
Navigating business insurance on your own can be overwhelming. Policies are complex, and without professional guidance, it’s easy to miss important details.
How to Avoid It: Partner with an experienced insurance broker like Baldersons Insurance. We help businesses secure the right coverage, avoid common pitfalls, and ensure they’re fully protected against unforeseen risks.
Avoiding these common business insurance mistakes can save you money, stress, and potential financial disaster. At Baldersons Insurance, we’re here to help you find the right coverage tailored to your business needs. If you’re unsure whether your current policy is sufficient, get in touch with our team today for expert advice and a free policy review.
