1851

There&rsquo;s a platinum rule that should drive every decision a business owner makes: treat your customer not just like you would want to be treated, but the way they want to be treated. In other words: work to understand what&rsquo;s important to them. Those who don&rsquo;t risk angering customers&mdash;or worse&mdash;losing them altogether.

This dynamic is particularly pronounced in the insurance industry. Agents, large and small, overlook those they serve, issuing blanket policies that don&rsquo;t truly look out for the best interests of their clients. It&rsquo;s particularly glaring in franchising, where agents who aren&rsquo;t familiar with critical industry regulations don&rsquo;t adequately protect those who need it most.

That&rsquo;s why Doug Groves founded EZ CERT. With decades of franchise experience under his belt, he quickly recognized that there was a glaring gap in the system that franchisors were using to track franchisee compliance. Now, instead of brands taking on the responsibility of hunting down coverage certificates,&nbsp;<a href="https://ezcertmgmt.1851franchise.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=5-common-mistakes-people-make-when-buying-business-insurance-2705067" target="_blank" rel="nofollow" target="_blank">EZ CERT</a>&nbsp;serves as an important middle man, utilizing its expert team to maintain relationships between a franchisor and local owners.

Of course, it&rsquo;s still important for franchisors and franchisees to do their part to help make business insurance work properly for them. Below are five common mistakes Groves sees during that purchase process.

1. Using an Agent Who Isn&rsquo;t Educated About Your Industry

Just as you should only take legal advice from an attorney or medical advice from a doctor, you should only take insurance advice from someone who truly understands what you need to protect.

&ldquo;Buying your insurance from someone who knows what you do for a living is important,&rdquo; said Groves. &ldquo;It&rsquo;s simple to say, but it often isn&rsquo;t followed. I shouldn&rsquo;t be insuring dynamite manufacturers or farmers because I don&rsquo;t know their businesses and what risks are involved there. But, I do know franchising and businesses.&rdquo;

Groves suggests spending time searching out someone who understands the business you&rsquo;re in. And, don&rsquo;t be afraid to lean on referrals from others.

&ldquo;Find people in your segment and ask them who they&rsquo;re using,&rdquo; he said. &ldquo;That can help with setting the right budget and ensuring you have the insurance you really need.&rdquo;

2. Not Using an Independent Agent

&ldquo;At EZ CERT/Program Insurance Group, we have the ability to create customized solutions,&rdquo; said Groves. &ldquo;When you&rsquo;re using a bigger, national or even regional insurance agency, you can get pigeonholed into types of coverage you don&rsquo;t need without the luxury of understanding what options are really out there for you. That doesn&rsquo;t mean those companies are all bad. Many of them actually have specialties themselves. Independent agents just have the flexibility to do a better job in specific spaces like franchising.&rdquo;

3. Not Insuring Correctly

You&rsquo;ve probably heard the adage before from a business owner. Maybe you&rsquo;ve even said it yourself&mdash;that you are far more insured than you need to be. Groves says that in most cases, that&rsquo;s a false belief.

&ldquo;People often think that they&rsquo;re paying too much or that they&rsquo;re over-insured. But, when you look into the numbers, you should see that it&rsquo;s about 1 to 2% of your gross sales, typically. That amount isn&rsquo;t going to break your business. If you go out of business, it&rsquo;s never going to be because you bought too much insurance. But, not having enough insurance&mdash;or having the wrong insurance&mdash;very well could break your business.&rdquo;

Think about your auto insurance, for example. Often, people buy the minimum amount of coverage, thinking that a potential accident will never happen to them. But, accidents happen every day.

&ldquo;People think liability claims will never happen to them, but they do happen to somebody. Things do go wrong. People slip or get robbed. Building roofs collapse. Employees get into bad car wrecks and people, unfortunately, do get killed. When bad things happen, you need to be prepared for them, and that&rsquo;s when insurance is a critical thing. Nobody wants to talk to the insurance man until bad things happen. But, by then, it&rsquo;s too late. That&rsquo;s why it&rsquo;s so important to make sure you have the best plan, because you truly never know.&rdquo;

4. Insuring Items That Aren&rsquo;t Critical or Even Important to Your Business

Insurance is meant to help in the event of a loss. But, that doesn&rsquo;t mean everything you own has to be covered.

&ldquo;People sometimes have lots of assets and they insure against inconsequential loss,&rdquo; said Groves. &ldquo;You may not have to have a policy for small things you might lose or a box of office supplies an employee might steal. But, major things that could break your business are important to cover. Look at the deductible amount to save costs there. You want to insure yourself from catastrophic loss, not inconsequential loss. We can&rsquo;t insure every small thing, but we can and should protect ourselves from a major loss.&rdquo;

5. Setting Limits that are Too Low

It&rsquo;s critical to set the right coverage limits for your particular franchise business&mdash;and no two are ever the same.

&ldquo;People buy a commercial automobile policy and they have minimum limits of coverage,&rdquo; Groves said. &ldquo;They may think that model should apply to all insurance. But, your car is the biggest liability most people have. We text, talk on the phone, listen to the radio, and, in a split second, can cause or be the victim of a multi-million dollar loss. Not having enough insurance coverage, in terms of limits, on that automobile can become a devastating decision for someone.&rdquo;

The key question is: how much insurance is enough? For Groves, there is a litmus test that should help make the decision easier.

&ldquo;Make insurance more attractive than you personally,&rdquo; he advises. &ldquo;Add up all of your balances and purchase insurance limits based on that. We want the plaintiff to say: &lsquo;I want to leave you alone&mdash;take your insurance and go on.&rsquo; When your balance sheet on limits is too low, that&rsquo;s when you can get into trouble. At the end of the day, they should go after the insurance coverage, not go after you.&rdquo;

5 Common Mistakes People Make When Buying Business Insurance

1851 Franchise

From personalized service to setting proper limits, EZ CERT and its affiliate Program Insurance Group help franchisors maximize both protection and value

This brand page has been paid for by 1851. Content within this page that is paid will showcase a Sponsored icon. This means the brand has engaged 1851 FRANCHISE to write the content. Content without the Sponsored Icon is aggregated media placements the brand earned. Questions can be sent to editorial@1851franchise.com

5-common-mistakes-people-make-when-buying-business-insurance

Lindora

Celebrating the Nurse Behind the Mission: How Melinda Endricks Is Powering Lindora’s Growth and Impact Nationwide

celebrating-the-nurse-behind-the-mission-how-melinda-endricks-is-powering-lindoras-growth-and-impact-nationwide

Sola Salons

Sola Salons Targets Chicago for Strategic Franchise Growth

sola-salons-targets-chicago-for-strategic-franchise-growth

Melting Pot

Photo of Melting Pot white chocolate fondue

How Melting Pot Franchisees Drive Year-Round Success Through Strategic Promotions and Local Marketing

melting-pot-franchise-year-round-success

Crust Pizza Co.

Crust Pizza Co. - Technology Piece - CTO Nick Fontenot - May 2025 - 1851 Franchise

Crust Pizza Co. Builds the Future of Franchising With Tech-First Strategy

crust-pizza-co-technology-nick-fontenot-cto

Paris Baguette

Paris Baguette’s Recipe for Expansion: Leadership, Community and A Vision for 1,000 Cafés by 2030

paris-baguettes-recipe-for-expansion-leadership-community-and-a-vision-for-1000-cafes-by-2030

Buying a Franchise Masterclass

 Franchise Opportunities

Get Support Buying a Franchise

How to Buy a Franchise White Paper

How to Buy a Franchise

How to Sell Franchises

How to Grow a Franchise

Find a Franchise Supplier

1851 Franchise Opportunities

Franchisor News

Franchisor Power Rankings

FranCamp Mastermind Summit

Franchise Resources

What ALEC-Laffer's Report Means for Franchising

Website Awards

Power Rankings

About 1851

Advertise on 1851

Contact 1851 Editorial

Terms of Use

1851 Login

GROWTH CLUB LOGIN

facebook

instagram

twitter

linkedin

youtube

DoorDash Expansion Could Reshape Delivery and Operations for Franchise Brands - 1851 Franchise

DoorDash Expansion Could Reshape Delivery and Operations for Franchise Brands

doordash-acquistions-deliveroo-sevenrooms

Crumbl Franchise Investment - TSG Consumer Partners -  1851 Franchise

TSG Consumer Partners Takes Minority Stake in Crumbl, Signaling Franchise Growth Potential

crumbl-franchise-investment-tsg-consumer

Yum Brands Reports Strong Q1 Results with Big Boost from Taco Bell

yum-brands-reports-strong-q1-results-with-big-boost-from-taco-bell

QSR: McDonald’s Gains Momentum With Chicken Innovation, Value Deals and Franchisee Support

mcdonalds-franchise-recovery-chicken-strategy-value-deals-2025

The Future of Franchising: Trends and Predictions for 2025 and Beyond

the-future-of-franchising-trends-and-predictions-for-2025-and-beyond

Layoffs Surge to Pandemic-Era Highs, Opening Doors for Franchise Growth

layoffs-surge-to-pandemic-era-highs-opening-doors-for-franchise-growth

Restaurant Business: Crumbl Cools Its Expansion, Refocuses on Profitability

restaurant-business-crumbl-cools-its-expansion-refocuses-on-profitability

Franchisee spotlight image with Randy and Sandy Craft, Children's Lighthouse logo on blue background

The Crafts’ Successful Journey from New Parents to Children’s Lighthouse Franchisees

the-crafts-successful-journey-from-new-parents-to-childrens-lighthouse-franchisees

Franchisee spotlight image with photo of Robert Trujillo and UWRG logo on blue background

How Robert Trujillo Expanded His Construction Business With UWRG

how-robert-trujillo-expanded-his-construction-business-with-uwrg

District Taco Franchise Costs, Fees, Profit and Data for 2025

franchise-deep-dive-district-tacos-franchise-costs-fees-profit-and-data

The Ultimate Guide to Selling Franchises: Building Your Brand’s Growth Machine

ultimate-guide-to-selling-franchises

5 Common Mistakes People Make When Buying Business Insurance

MORE STORIES LIKE THIS