Exposing Seven Myths That Could Destroy a Small Business

Independent Survey Finds Majority of Small Business Owners Underinsured or Not Insured at All


Farmington, CT — February 28, 2011 – BOLT, a leading insurance agency exclusivelyprotecting small business owners, uncovers several myths that lead owners to puttheir small businesses at risk. In a recent independent survey of small and home-basedbusiness owners, BOLT learned that the majority of these owners are underinsuredor not insured at all based on the false belief that their risk is minimal.


“The extensive business owner interviews we conducted exposed some basic businessrisk myths that point to misinformation as the main culprit preventing businessowners from adequately protecting their small businesses,” said Tom Hammond, ExecutiveVice President at BOLT. “The complex nature of the commercial insurance industryhas put owners at a information deficit, causing them to unknowingly leave theirbusinesses vulnerable. It only takes one alleged accusation from a disgruntled employeeor customer to devastate or terminate a well-run business. Many small and home-basedbusiness owners don’t even know the extent to which they are putting their businesses,and in many cases their personal assets, at risk.”


Well over half of survey respondents qualified as “underinsured” meaning eitherno insurance, the wrong coverage or lacking coverage in key areas. The researchshowed that most underinsured small business owners felt fairly comfortable becausethey perceived themselves to be at minimal risk. Small business owners surveyedcited one or more of the below myths as reasons for this belief:

    1. “The way I run my business, I don’t expect to be sued by either customers or employees.”
      Even the best run business can be sued in today’s litigious environment and even if the claim is false and no judgment is awarded, the costs to defend the claim in court can bring a business to a full stop, squandering precious time and resources. Commercial Liability policies can pay for the full defense of your business regardless if the claim is true or false.
    2. “I’m protected by Incorporation and my Contracts.”
      The reality is that corporations are separate legal entities and are sued as such all the time for common law torts. In cases of gross negligence, punitive damages could be awarded in addition to general damage awards. In addition, corporate contracts and agreements put into place between clients, vendors, employees and/or 1099 contractors will only recognize transfer of liability for certain types of negligence.
    3. “I have a home based business so I am covered by my homeowners policy.”
      Most personal homeowner’s policies exclude coverage for business pursuits.
    4. “I’m covered under my landlord policy.”
      Under most lease agreements, control of the property is relinquished to the lessee and, as such, they are required to carry their own insurance.
    5. “I don’t produce a product, so the risk is with the manufacturer.”
      If you alter or re-package a product in any way, you will stand in the place of the manufacturer. You can also be sued for any warranties you make about the product.
    6. “I don’t have enough business assets to protect.“
      Depending on the type of business entity, and the claim of liability, personal assets can be exposed.
    7. “I will just close my doors.“
      Bankruptcy laws can be tricky and in many cases its not as simple as just closing your doors. More importantly reputation and good will can be more valuable than the cost of insurance to protect your business.


In addition to falling prey to the misinformation that leads to these kinds of myths,90 percent of respondents didn’t have adequate knowledge of what can be insuredat a small business. Many of the owners who did have some amount of insurance sharedthat they were uncertain about the way they chose their agents as well as whetherthey were being proactively informed. Nearly all of noninsured small business ownerscited the complexity of the process as one key reason for not getting coverage.


About BOLT
BOLT, the Business Owners Liability Team, is a national insurance agency that exclusivelyprotects the owners of small businesses. BOLT agents help business owners choosethe right insurance products to fully protect both their businesses and themselvespersonally. BOLT offers an on-line and interactive experience with leading carriers.As such, business owners can thoroughly compare coverage and pricing, and ultimatelypurchase cost-effective insurance for their businesses within minutes. Businessinsurance policies offered by BOLT include, but are not limited to, General Liability,Business Property Insurance, Workers’ Compensation, Commercial Auto, Umbrella Insurance,Errors and Omissions, Directors and Officers, Business Interruption, EmploymentLiability, Sexual Harassment and Flood. These policies are provided by top-ratedinsurance carriers such as The Hartford, CNA, Liberty Mutual, Ace and Chubb. BOLTInsurance Agency is headquartered in Farmington, CT, and is licensed to do businessin all fifty states. Come visit us at: www.boltinsurance.com


Media inquiries:
Josh Baker
Director of Marketing
BOLT Insurance Agency
[email protected]