There are a lot of misconceptions and misinformation out there when it comes to the small business insurance myths that some business owners believe. We are often asked questions from our customers and partners while we’re on the road, so we thought we would put together a presentation to set the record straight.
6 common small business insurance myths:
1. I am covered through my normal home insurance policy:
Most homeowner policies either don’t cover business-related damage/ loss or don’t provide adequate coverage for your business needs. This not covered in your personal policy include:
- If you stock premises and it is damaged or stolen, your homeowner policy will not cover the cost to replace or repair it.
- If your business requires the use of expensive equipment and it is stolen, damaged or breaks down you will not be covered in your homeowner policy.
- If your product or services causes you be sued by a customer and/ or a supplier your homeowner policy will not cover any damages or legal expenses you could face.
- If you’re sued by a courier delivering a business package or a customer who was injured by crafts or jewellery that you sell, your homeowner policy will not cover any damages or legal expenses you may face.
2. I work from home, so I don’t need to worry about liability issues:
Liability is actually the biggest risk that home business owners face. Always maximize your liability coverage as it can literally save your business in the event of a loss. General liability coverage covers injuries to customers, supplies, employees or visitors to your property. It also covers you and/ or your staff if you’re conducting business off-site.
3. My car insurance policy will protect my business items
Personal auto insurance policies do not cover work-related items that are stolen or damages while in your vehicle. A commercial auto policy will protect you from business-related property losses and certain liabilities.
4. Small businesses don’t require commercial insurance policies
No business is to too small NOT to have commercial insurance. The small your business, the bigger the financial impact could be if you’re sued or experience a loss that isn’t covered by your homeowners insurance policy.
5. If I get sued, I can just shut down my business to avoid litigation
Closing your business will not necessarily protect you from a lawsuit. Courts tend not to care whether or not a business is currently operational. In a worst-case scenario, you could be required to cover settlements or judgments from your personal assets if your business cannot cover them.
6. Business insurance is too expensive:
It’s more affordable than you think. If you choose to work with an insurance provider that specializes in small business, there will often be flexible payment options available.