Researching about small business insurance can be exhausting! You might not know exactly what insurance you may need, and there’s a lot of misinformation out there that can lead you in wrong and costly directions. But don’t worry: we want to make sure you’re properly protected. That’s why we’re clearing up the air with these four small business insurance facts. These facts can help you make the right decisions when you’re shopping around for small business insurance.

1.  Run your business from home? Your home insurance policy probably won’t cover your assets.

You might think your home insurance policy will help cover any business-related damages or losses at your home, but the truth is, your home insurance policy will likely be missing key coverages you need to protect your business and its assets. For example, your policy probably won’t cover any of your inventory that gets damaged or stolen. Here are some other things not covered in your personal policy:

• If your expensive business equipment gets damaged or stolen
• If your business equipment causes an electrical fire or similar disaster
• If you damage a customer’s property, such as their car

Here’s the worst part: if your home insurance provider doesn’t know about your home-based business, they might not even cover your home at all in the event of a disaster. Business-related risks like the ones above could cause damage to your property, and if your home insurance provider isn’t aware of these additional risks, they might invalidate your home insurance policy and leave you without any home coverage.

What’s the solution in this scenario? Commercial property insurance can help you cover your home and your home-based business. This coverage can help you protect your business contents if they’re damaged or lost, including inventory, your electronics, and any specialized equipment you use for your business operations. Commercial property insurance also covers things outside of your home, including outdoor signs, fencing, and landscaping. With commercial property insurance, you can make sure that your home-based business is properly protected, inside and out.

2. Liability insurance is essential for your small business, even if you work from home.

Whether you’re a consultant, a retail business owner, or a skilled trades contractor, you’re exposed to a variety of liability risks. Liability refers to your small business being held legally responsible for damages to a third party, such as a customer. These damages could include bodily injury, property damage, or causing a customer financial loss. All of these instances can lead to a customer filing a costly lawsuit against your business. Even if you work from home, your business is still exposed to costly liability risks, whether you damage a customer’s property, make a crucial mistake in your work, or create a faulty product that you sell to a customer.

What are the solutions in these scenarios? Well, here are the main types of liability insurance coverages you should consider for your small business:

• Commercial general liability insurance, or CGL insurance, is the main ingredient for protecting your small business from liability risks. Think of it as the meat and potatoes of your insurance policy. It’s designed to help protect your business if you’re found legally liable for bodily injuries or property damage to a customer, a supplier, or another third party. It’s also required if you wish to participate in tradeshows and similar events; to participate in tradeshows, organizers will usually ask you for proof of CGL insurance before letting you set up a booth.
• Professional liability insurance helps protect your business from costly client lawsuits. If you consult, design, or provide another type of paid service, your clients will hold you responsible for your work. Mistakes in your work, whether you miss a deadline or forget a critical requirement, could expose your business to damaging lawsuits from clients. Professional liability coverage can help protect your business from minor mistakes that could lead to major lawsuits.
• Product liability insurance helps protect your business if a product that you make or sell causes bodily injury or property damage to a third party. Design and manufacturing defects can cause a product to be unsafe or faulty. Even if you didn’t make the product in-house, you could be found responsible for damages if an incident can be traced back to your small business. The right product liability policy will help protect your business from legal costs if you’re found responsible for a damaging product.

3. Drive a car for your business? Your personal car insurance policy may not be enough.

A lot of small business owners think that they are covered by their personal auto insurance in the event of an automotive claim—but that’s not always the case.  Whether you’re contractor driving between job sites or a caterer completing food deliveries, you may leave yourself vulnerable to costly losses if you don’t have the proper protection in place.

For example, if you have any stickers or decals on your vehicle that advertise your business, your personal auto insurance might not cover you if you get into an accident.

What’s the solution in this scenario? Commercial auto insurance will help cover your business vehicle if you get into an insured care accident. It will help cover injuries to you, your employed drivers, or any passengers you might have, and will help cover costs such as medical expenses and lost wages. It may also help protect you from liability risks when you’re transporting products to customers or events.

There are key differences between when a commercial or personal auto insurance policy would provide coverage, and these differences could leave you vulnerable to an expensive loss.

4. Small business insurance is more affordable than you think!

Running your own business can be rewarding! It can also be costly, especially when you’re just getting your business off the ground. Insurance might not be a top priority for you, but not having the right protection for your business could leave you exposed to costly risks. If you experience an expensive loss and don’t have the right small business insurance coverage, you may not be able to fully recover from the damage.

But don’t worry: small business insurance is more affordable than you think. If you choose an insurance provider that specializes in small business (like TruShield!), you’ll find a variety of coverage options available that are suited to your specific business. The right small business insurance provider can build you a customized and affordable insurance policy that meets your business needs with the right coverages in place. TruShield is able to offer small business policies starting at as little as $50/month.

It’s important to remember that what one small business needs may not be what yours needs. Every business is different, and requires a different policy to protect it. Understanding the various types of coverages available to small business owners can be overwhelming, and, quite frankly, somewhat boring. Lucky for you, our online estimator can help. Just answer a few questions about your business, and we’ll recommend the appropriate coverages that can help protect your business. We’re also always available by phone at 1.844.429.9480, in case you have any questions.