In today’s climate, business insurance is required, but many owners don’t understand the fundamentals of this type of policy, such as why it’s required, what it covers, and how to obtain sufficient coverage for yourself and your company.
Here are five common myths about business insurance, as well as legends.
Myth 1: If you don’t have employees, you don’t need business insurance.
Facts: Whether you manage a team of five or fifteen, or you’re a one-man or woman show, having business insurance is a must for any serious business owner. Many of the risks associated with entrepreneurship are simply not covered by standard homeowner’s insurance. And, if you’re an independent contractor in a high-risk industry, such as contracting, you’ll almost certainly need specialized coverage to protect yourself and your clients.
Myth 2: A basic policy is all that is required.
Facts: This may be true for a few business owners. However, each business is unique: some may rely on extremely valuable equipment or inventory, others may deal in sensitive data, and still, others may face a higher risk of being sued. It is critical that you understand how a standard policy will or will not work for your specific business and situation. Then, you can consult with an independent insurance agency, such as us, to determine the best ways to fill in the gaps.
Myth 3: You can avoid purchasing auto insurance if you or your employees use their own vehicles.
Facts: Whether you have one or several designated business vehicles or not, having an auto insurance policy is required if you or your employees drive for business purposes. Your standard auto insurance policy is unlikely to cover accidents or injuries that occur while doing business, so don’t overlook this critical coverage if it applies to what you do.
Myth 4: Business insurance is extremely costly.
Facts: The opposite is true: business insurance can be extremely affordable, and it is a small price to pay to protect your livelihood and the company you have worked so hard to build. A well-rounded insurance policy will provide you with peace of mind, allowing you to pursue your dream without fear.
Myth 5: Business owners are exempt from purchasing worker’s compensation insurance.
Facts: It’s true that in some states you can apply for an exemption to avoid having to purchase worker’s compensation insurance, but that doesn’t mean it’s the best option for your company. In some cases, if you or any independent contractors you work with are injured, guess who could be held liable? Your customers. A savvy customer or contractor may want you to have worker’s comp insurance before working with you, so be sure to know your industry and what will be expected, if not required.
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