Insurance is important in today’s economic environment. We have health insurance in case we get sick or injured. We have car insurance so we can drive legally and to protect ourselves in the event of an accident. Companies are no exception to the rule. If you own a business, you need the right type of business insurance to protect it.
The following are common business insurance myths – debunked:
1. A small business does not need insurance
This claim is simply false. We live in a litigious society and a company of any size can be sued. Many small businesses are involved in litigation each year.
Business insurance is not about the size of your business property, the number of people you employ or even your revenue. It should be based on the risk exposure your business faces. Whether the risk is fire, theft, liability, or a lawsuit based on a service or product your business provided, the right insurance coverage can help protect your business from disaster.
2. Homeowner̵7;s insurance covers my home-based business
If you are self-employed and work out of your home, it is important to know that your home insurance does not provide adequate coverage for your home-based business. The typical homeowner’s policy provides just $2,500 in coverage for business equipment, according to the Insurance Information Institute (III). This may not be enough to cover all of your business property. You may also need coverage for liability and lost income, which a homeowner’s policy does not provide. To insure a home-based business, your options may include:
- Recommendations: If you add a referral to your existing home owner, you can increase your coverage for business equipment. You can also add a homeowner’s liability endorsement if a customer or delivery person is injured on your property.
- Company policy for home use: This type of policy can provide more comprehensive coverage for your home-based business. Policies can vary widely from one insurer to another. In addition to protection for your business property, most will compensate you for the loss of important records, and some will cover lost income from business interruption. Generally, these policies provide broader liability coverage with higher limits.
- Business Owners Policy (BOP): This type of policy is designed for small to medium-sized businesses. It’s a good choice if your home-based business operates in more than one location. A typical BOP will cover business property and equipment, liability, loss of income and extra expenses, on a much broader scale than a home business policy.
3. Business insurance is too expensive
Business insurance is not free, but it is necessary to run a business. It is not cost-effective to cut back in a way that puts your business at serious risk. Small businesses are sued every day for various reasons. The cost of your business insurance will depend on several factors, including your size, your location, and the types of services or products you provide.
Our agents have extensive experience in business insurance. We can help you get the coverage you need at the best prices available.