The SPPAPeople often have misconceptions about business insurance coverage. Here are some of the most common ones:
I don’t need insurance if my business is small.
Many small-business owners believe they don’t need insurance because of their business or staff size. However, even small businesses face significant risks, and one incident can lead to financial devastation. Every business, regardless of size, should have at least basic coverage.
General liability insurance covers everything.
Some owners assume general liability insurance will cover all their needs. While it does provide broad protection against common risks like slips and falls, it doesn’t cover everything. For instance, it doesn’t cover professional errors, employee injuries or property damage to your business assets.
My homeowner’s insurance covers my business.
People who run businesses from home may think their homeowner’s insurance extends to their business activities. However, standard homeowner’s policies typically do not cover business-related liabilities or losses. Business owners should consider a separate policy or an endorsement to their existing policy.
Insurance is too expensive.
Many entrepreneurs assume business insurance is prohibitively expensive and opt to forgo it. However, the cost can be manageable, especially when compared to the potential financial losses from lawsuits or damages. Additionally, there are often options to customize less expensive coverage.
Once I get insurance, I’m covered for life.
Some business owners believe once they purchase an insurance policy, they don’t need to think about it again. In reality, insurance needs can shift due to growth, changes in operations or new risks. It’s important to regularly review and update your coverage.
All policies are the same.
There’s a misconception that all insurance policies offer the same coverage. In truth, policies can vary widely in terms of coverage, exclusions and limits. It’s crucial to read the fine print and understand the specifics.
I can wait to get insurance until something happens.
Many entrepreneurs wait until after an incident occurs to think about insurance. This is risky, as most policies require you have coverage beforehand. Not having insurance when you need it can lead to devastating financial consequences.
Workers’ compensation insurance is optional.
Some owners mistakenly believe workers’ compensation insurance is optional, especially in industries with low perceived risk. In many places, this coverage is legally required once you have employees. Failing to obtain it can lead to severe legal and financial penalties.
My business is too unique for insurance.
Some entrepreneurs think their business or industry presents risks that cannot be insured, but insurance companies often offer products tailored to unique industries. It’s worth researching and consulting with an insurance broker to find the right coverage.
By dispelling these myths, business owners can make more informed decisions about their insurance needs and better protect their operations against potential risks. Protect your work, protect your life.
