After developing a solid business plan, many business owners begin to look at options for commercial insurance. However, there are some myths surrounding the investment that should be debunked before owners purchase coverage.
1. That you don’t need coverage – Even the most careful person can be involved in an accident or incident, so having a basic small business insurance policy can be helpful in preventing lawsuits and covering medical expenses should anyone be hurt. Many factors, especially in a business setting, can be unpredictable, while mother nature may be to blame for damages to your company. Additionally, having insurance doesn’t mean you or your employees have more wiggle room when it comes to being careless, as multiple claims will increase your premium and deductible and bad practices can tarnish your business’s reputation.
2. My company is too small for its own policy – Even in the early stages of development, any time you have invested money into your company, you will want to have coverage for it. Keep in mind that you won’t be expected to pay similar premiums to larger corporations, as you may have less risks associated with your services and fewer assets to protect. Should an event occur and items be damaged, the costs of repair or replacement could be high enough to prevent your company from growing and being successful. Smaller companies may also frequently run into closer lines of personal liability for claims, since many business owners are more closely tied to investments and purchases.
3. My home insurance offers coverage for my at-home business – This may be the most popular misconception for small business owners who are saving money by working out of their own house. The main issue is that some insurance companies may consider a designated work space within your home as commercial property, which could make a claim to your coverage provider invalid. The insurance needs of business owners is also much different, and liability of your company and yourself can vary greatly. You will want to have coverage for all the pricey equipment you may purchase to use at home, and home insurance limits are often considerably smaller than business plans.
4. Insurance isn’t necessary for temporary employees – This is one thing many company’s may easily forget, but temporary employees and even volunteers injured on your property of because of a duty they have been assigned as work will need to be compensated by your insurance plan.