Whether you’re running a startup or a small to medium enterprise, insurance is a cornerstone for efficient business operation. The essence of insurance is to provide a financial cushion if things take a turn for the worst. As a business owner, you’re likely to encounter some half-baked truths and some outright myths concerning insurance. Here’s a look at a few commercial insurance misconceptions.
Your Small Business Doesn’t Need Insurance
An insurance policy isn’t about how much revenue your business is raking in, the number of employees you’ve hired, or the physical space your business occupies. In the end, commercial insurance is based on risk exposure. Risk takes many forms and could range from theft, injury to staff, or even lawsuits from customers. Never assume that your business is too small to insure.
Your Home Insurance Covers Your Home-Based Business
This is a big commercial insurance misconception. You may opt to start a business from the comfort of your home. Perhaps you’re trying to cut back on renting out extra space, or you enjoy the convenience of home-based operations. Whatever your reasons may be, always keep in mind that your home and home-based business are separate entities, and that’s how your commercial insurance provider views it. Your business is susceptible to more risk than your conventional home. As such, don’t expect your home insurance to cover your business.
Your Personal Auto Insurance Covers Vehicles Used for Business
Maybe you have a nice, spacious sedan that you’ve decided to use for deliveries and picking up business supplies. In case of an accident in the course of running your business errands, your personal auto insurance will not cover your claims. Personal auto insurance and commercial auto insurance are very different. If you’re planning to use your personal car to carry out business, get a bona fide commercial car insurance policy.
As a Small Business, There’s No Need to Think About Cyberattacks
According to a 2020 report by Security Magazine, around 2,200 cyberattacks happen each day. That’s equivalent to an attack roughly every 39 seconds. You might be forgiven for thinking that running a small business keeps those nasty hackers at bay (after all, why go after a start-up when there are larger Fortune 500 companies?). Fun fact: smaller businesses are a prime target for hackers. Cybercriminals have quickly learned that small businesses have less robust security systems if any. Cyber Risk Insurance protects your business from data breaches.
There’s No Need for Property Insurance If You Don’t Have a Physical Location
There’s a distinction between property and real estate. Even if you don’t run your business from, say, an office or a warehouse, there are physical items you use to carry out day-to-day business activities. The term “property” essentially means any possessions you use in your line of work. Even for a small business, commercial property insurance is vital to cover any equipment or inventory and pay for repairs or replacements in case of loss, damage, or destruction.
Commercial insurance is an important part of any business, regardless of its size or revenue. Even with all the noise surrounding commercial insurance, it’s essential to separate the truth from the trash. Never doubt the importance of insuring your business. Have questions about the coverage your business may need? Call one of our helpful Customer Service team members to get answers to any commercial insurance misconceptions you may have. (866) 277-7162