Every small business owner knows the importance of saving money whenever possible, but many businesses make costly mistakes without knowing it. When it comes to business insurance, a small mistake can mean big bucks down the road. Are you making these mistakes?
Neglecting to Review Coverage
A business is in constant flux, which means coverage needs are always changing. If you neglect to review your business insurance policies, you could wind up underinsured—which could be extremely costly in the event of disaster—or over-insured—which means you’re spending more on premiums than necessary. Review your coverage with your independent insurance agent every year or after big changes like relocating, hiring/firing employees, investing in new equipment or offering new services.
Paying for More Insurance than Necessary
Stemming off the previous topic, paying for more coverage than you need is an expense that can easily be cut. The key is to work with an agent who is familiar with your business’ industry and the associated risks. Speaking with an agent with this knowledge saves you a lot of time that would otherwise be spent explaining the ins and outs of the business. And a knowledgeable agent can quickly discover if you’re paying for a policy that isn’t necessary.
Using the Wrong Classification Codes
Employee classification codes are used by workers compensation insurance providers to identify the hazards associated with the job. For instance, it will be more expensive to insure a construction worker or police officer than it would cost to insure a secretary or web developer. With over 700 codes, it’s easy to overlook a mistake. Ensure that all employees are classified correctly, rather than assigning a blanket classification for your entire staff.
Misclassifying Independent Contractors and Employees
Classifying independent contractors as employees or vice versa can lead to costly trouble. If caught by an IRS audit, you could be held responsible for back taxes and overtime pay. Not to mention, if you’ve classified a contractor as an employee, you’re wasting money paying into Social Security and Medicare when you don’t need to.
Check your coverage today. Call Keats Insurance Agencies for more information on business insurance.