You’ve heard all kinds of things about business insurance from friends, family, or co-workers, a lot of which seem to make sense.
It’s easy to take for granted that information and advice given from someone you trust is as good as gold, but you may want to give that gold the bite test before counting on it to protect your business.
Believing one of these common business insurance myths could be putting your business at risk:
- Homeowners insurance covers your at-home business.
- You don’t have enough employees to need workers comp coverage.
- Personal auto insurance covers you even when you use your car for business purposes.
- General liability insurance will cover it all.
- You don’t need an insurance agent.
Let’s get these myths debunked — your business survival may depend on it.
Myth #1. Homeowners Insurance Covers Your At-Home Business
There are a lot of perks to operating a business out of your home. No commute, no dress code, reduced overhead…maybe that’s why 38 million people are running a home-based business in the US.
While their are many cost-savings perks of operating a home-based business, skipping out on business insurance isn’t one of them.
Homeowners insurance is designed to protect your home. But it’s not designed to protect your business.
Most homeowners policies specifically exclude business liability coverage, meaning if a customer who's visiting your home is accidentally injured, you're on the hook for the cost of injuries.
You also won't be covered if your work materials and equipment are damaged by the perils protected under your homeowners policy. It may not seem like a lot, but could you afford to replace everything in your home office if it was destroyed by a fire?
Be sure you have proper business insurance coverage in place, even if you work from home.
Myth #2. You Don’t Have Enough Employees to Need Workers’ Comp
Again, you're at your home office with your one part-time employee. He helps with errands, filing, and some data entry.
He's barely ever there and there's just one of him - so you don’t need workers’ comp insurance, right?
In most states, you are legally required to carry workers’ compensation insurance — even if you only have one single, part-time employee.
Every business has some risk.
Your employee could trip on loose carpeting at your office entry, suffer whiplash from getting rear-ended while driving to the copy shop, or befall any other number of unforeseen accidents while on the job.
Don't get stuck paying out-of-pocket for medical expenses, wages lost during recovery, or disability expenses.
Have workers comp insurance in place to protect anyone that works for you.
Myth #3. You Don’t Need Commercial Auto Insurance
Does your vehicle do double-duty as a personal and business vehicle?
Maybe you're a contractor with a hard-working truck that hauls tools and equipment during the week, and kids, soccer equipment, and groceries on the weekend.
You have a great personal auto policy that has you covered, no matter what surprises may await you, right?
If you are in an accident while driving your truck for work, your insurer will most likely deny your claim.
If you use your vehicle for business reasons, or if your business owns any vehicles, then you’re likely going to need commercial auto insurance.
Myth #4. All You Need is General Liability Insurance
Your office is teeming with equipment, materials, and inventory that are valuable business assets. It took you years of hard work and long hours to build your business up to what it is today.
If anything were to happen to the things inside your business, your general liability insurance would have you covered, right?
General liability is an important cornerstone coverage and it does protect your business from many losses, but those protections are for third party specific injury or damage.
If it belongs to you, it's not covered under general liability.
Commercial property insurance will protect you from losses should anything happen to your business assets.
Myth #5. You Don’t Need an Insurance Agent
You have a good head on your shoulders and have done all the research – you know exactly which coverages your business does and doesn't need.
Why deal with an insurance agent when you can do it all yourself, right?
Insurance agents are specialists in their field, just as you are in yours. They may spot special risks specific to your business that you can insure against. They may have special relationships with insurance carriers who specialize in industries like yours, allowing them to negotiate a lower price for coverage. Or they may be able to package your policies together to help you save even more money on your premium payments.
Talk to your insurance agent to find out how to best protect your business from losses due to unforeseen perils.
Say goodbye to these commonly held myths. Your business will thank you.