A Common Pitfall When Signing New Contracts, and How to Avoid it

 

Whenever you sign a new contract, you could be exposing your business to a range of risks that you’re not even aware of.

In this article, we share one key trick that could mean the difference between business success and rock-bottom failure.

 

Reviewing your business insurance policy

Regardless of whether you run a small business or a large enterprise, having a suite of comprehensive insurance policies is essential. They can safeguard your livelihood, prevent financial uncertainty and protect you from unexpected events like fire, theft, property damage, and customer insolvency.

However, when you’re tangled up in the everyday chaos of running a business, it can often be easy to forget about your insurance policies and what your coverage entails. In other words, the policies that you agreed to when you first started your business may no longer cover your current needs.

For example, before signing a new business contract — particularly a complex one — most business owners will consult with their lawyer. But, what about your insurance broker? When was the last time you had your new contracts checked by them?

Does your insurance policy protect you under the terms of your new agreement?

Whenever your business activities change, so do your risks. Taking on more staff, leasing a new business premise, or acquiring bigger assets can all affect your business insurance coverage. As a result, it’s important to review your policy whenever any significant business changes take place.

Our one key trick? Consult your insurance broker before you sign any new contracts.

Your insurance broker can help you:

  • Choose policies that are tailored to your unique needs and requirements.
  • Provide guidance and personalised advice.
  • Ensure that nothing is excluded and that there are no ‘loop-holes’ in your policies.
  • Negotiate the best industry-specific solutions for you with a range of providers.
  • Evaluate your risks and identify any ‘grey areas’ that are associated with your new contracts.

Your business has become more valuable — protect it with the right insurance policies

Whenever you sign a new contract and experience company growth, the value of your business goes up. And, when the value of your business increases, so do the stakes. If you just renew your policies at the end of the year, without evaluating your current circumstances, you could be putting yourself at unnecessary risk.

Before signing any new contracts, you should ask yourself this: do your current insurance policies cover the scope of your new activities? Is the amount of coverage correct? And, does your cover exclude anything?

The consequences of not reviewing your insurance policies before signing a new contract could potentially be catastrophic. Put simply, it’s not worth the risk for you, your business, or your family.

 

Are you looking for an experienced insurance broker like Allsafe? Send us an online enquiry today to find out how we can help you.