Knowing the truth about your insurance policies and coverage is just as important as knowing the false information floating around out there. Today, we are going to be talking about and debunking some of the most common small business insurance myths out there!
If the last year has taught us anything, it’s that we need to be prepared for anything and everything that could come our way. This idea has been applied to every aspect of our personal and professional lives. We have been right here along with each of you figuring out the best way to go about handling everything. Our daily focus is on how to best support our clients and figuring out how Abri Insurance can continue to offer the best care and support possible for you, your loved ones, and your possessions no matter what might come your way.
Small businesses felt and continue to feel some of the most painful and difficult effects of the pandemic, and many are struggling to recover still. The waters are still unsure, and who knows what’s to come. One of the best ways to keep up the fight and to keep going is to make sure you have the correct insurance policies and the correct coverage for your small business. While the world continues to make its moves back to a sense of normalcy in its own and unique way, it’s also important to know and squash any incorrect information and myths that are floating around out there about your small business and small business insurance. This way you can continue to recover, know what to avoid and ignore as you get back to work, and focus on the task at hand to get you back to operating as normal!
What Is Small Business Insurance?
Let’s start with the basics! What is small business insurance and what do you need to know about it? One of the most important things to remember in this situation is that small business insurance is there to protect and cover what you’ve built over the years. You’ve worked so hard to create your small business, you deserve and need someone to work just as hard as you to watch over everything you’ve built and created. Small business insurance, or commercial insurance, is dedicated to protecting a business’s income, property, and it’s assets. The most common policy for a small business is called a business owners policy, or a BOP. A BOP will include three types of coverage to help protect your business; interruption coverage, liability coverage, and business property coverage. Depending on what type of small business you own, you may also be able to buy additional insurance coverage that is customized for your needs.
What Does Small Business Insurance Cover?
We know this question is at the tip of your tongue, and it should be! It is very important to know what is included in your BOP. Most basic policies will cover things like financial loss, damages from things like theft, fire, wind, falling objects, and lightning. A BOP might also help you replace business property if it is damaged due to man-made and natural disasters such as machinery, office furniture, and computers. It will also help, if you own your office building, to pay for any damages done to it by fire or other natural disasters. General liability within a BOP will help pay for the medical expenses that might accrue if a customer or a visitor is injured at your office and can also help cover legal fees as well. Finally, a BOP will also help with business interruption coverage. If your business is interrupted due to some kind of peril, this will help cover the cost of rent, lost business income, and repairs being made to your building.
Examples of Small Business Myths
Now that you know more about what small business insurance is, what a BOP is and what it will offer, it’s time to dig a little deeper and debunk some very tricky myths floating around out there about small business insurance!
Fiction: My employees drive their own cars. This means that I don’t need to buy business auto insurance.
Fact: It is very important to understand that while you and your employees might have auto insurance, you can’t assume that it will cover any incident that happens when an employee is using their personal vehicle for business purposes. To be safe and to avoid any uncovered losses, to protect your employees, your company, and yourself, it is best to talk with us at Abri Insurance or with your insurance agent about getting the sufficient insurance you need for commercial auto coverage! Please note, this can come with perks! You can get coverage for rental vehicles, GPS equipment, and lease/loan gap coverage.
Fiction: My business is too small for a cybersecurity breach!
Fact: We will need to talk about this in another blog in the future, but please note that any cybercriminal will not discriminate when it comes to hacking into a company’s private information to get what they want. If they want to go after a small company or a large company, a cybercriminal will do what they wish. You are always at risk and you will need to be covered for this risk. The House of Representatives Committee on Small Business reports that 40% of all cyber-attacks are focus on companies with 500 employees or less. Your plan should include privacy breach and cyber liability coverage. This can be included in your overall liability coverage.
Fiction: My umbrella policy has it all covered!
Fact: Just because your small business has an umbrella insurance policy doesn’t mean that you’re covered for anything and everything! Please speak with your insurance providers or with us at Abri Insurance to learn more about what exactly your umbrella policy covers and what it does not cover.
Fiction: You don’t need insurance to cover your small business located in your home!
Fact: For anyone who is a small business owner that went through the first year of the pandemic knows that this is very false! Remember, even if you have an excellent homeowners insurance policy, this doesn’t mean your home office, business, or your business equipment will be covered. Your home and the structure of your home will be covered under your homeowner’s insurance policy, but nothing pertaining to your business will be. This will require additional coverage!
Fiction: If I don’t have any employees, I don’t need workers comp insurance!
Fact: Remember, even if you are a one-person operation, you still have an employee; you! While some states, like Texas, don’t require you to have workers comp, you are still putting yourself and your company at risk if you don’t have workers comp, even as a business of one. You could personally be held accountable and responsible for damaged products, cause of injury to your clients due to your faulty products, if shipments aren’t fulfilled, and more.
Fiction: Contracts will always protect you from legal action.
Fact: No matter how legally sound or binding a contract might be, if you don’t uphold your contractual obligations to a client or an employee, legal action could still be taken against you! This is where professional liability insurance can help you cover your losses and mitigate risk when a client is upset by your products and services.
Fiction: When you get small business insurance, comprehensive insurance is yours by default!
Fact: You will get general liability insurance when you get a small business insurance plan. Please note that this is just general coverage. It will cover most of your business needs but not certain things that might be important or pertain to your business.
Fiction: You can lower your insurance premium by reporting a lower payroll or lower revenue.
Fact: Please don’t report false information to your insurance company to pay less for your coverage. This is what is called insurance fraud. This can cause some serious damage to your company, reputation, and you could end up with a huge bill to pay back what you were trying to save.
Fiction: Business insurance is too expensive.
Fact: Why is this always a fact that has to be challenged? While yes, you will be paying for a product and service that you might not use very often, when you do need it, it will end up saving you so much money and protect you, your business, and your employees. Your business is worth protecting, isn’t it? A good rule of thumb to remember is that the smaller your business, the more insurance you should consider. If it is just you that is in charge of your business, you will be at fault and responsible if anything goes wrong!
Fiction: Malpractice insurance is only something that doctors need to worry about!
Fact: Medical malpractice is only one form of Error and Omissions coverage. Another form is known as professional liability insurance. E&O insurance will help cover you if you find yourself in a situation where you end up having legal fees to pay due to being sued for negligence or harmful advice. No matter the mistake, lawsuits will still always be possible and you will need protection.
Small business owners, this was a blog dedicated just to you! We urge you to take this information to heart and to invest in an excellent small business insurance plan. We also recommend that you know everything about your policy inside and out. If you are a small business owner in need of the best coverage available or if you want to understand your existing policy a little better, please reach out to us at Abri Insurance. We are more than happy to speak with you about this topic! We’re Abri Insurance and we are here to make sure you have the best coverage for life in the Lowcountry!