As a small business owner, you must wear many hats to ensure your business runs smoothly. Often insurance myths cloud our judgment on making vital coverage decisions. We’ve exposed the truth for many common commercial insurance myths.
Don’t believe everything you hear. Knowledge is power, and in this case, knowledge means making informed insurance decisions to ensure your business is adequately protected.
5 Common Business Insurance Myths You Need to Know About
MYTH#1: General Business Insurance Covers A Privacy Breach/Hacks
Your general business insurance doesn’t automatically ensure you are covered for potential expenses should you experience a data/privacy breach/hack. To adequately protect your business from cyber risk, it’s imperative you have cyber insurance. If you’d like to find out what your Business Cyber Risk Exposure Score is, click here.
MYTH #2: If You Are Named in A Lawsuit, You Can Just Close Your Business
Ultimately, closing your business doesn’t automatically protect you from a lawsuit. Often, our judicial system proceeds even if your business is no longer operational. Furthermore, if you were found liable and ordered to pay a judgement or settlement you could be found personally financially accountable.
Rather, having a commercial general liability policy could protect you against lawsuits.
MYTH #3: Home Insurance Will Covers Claims for Home-Based Businesses
If you operate your business out of your home or work from home, you may be surprised to learn that your homeowner’s policy doesn’t protect against business-related damages. It’s important to protect your business inventory, equipment, computers, and other property, which requires a separate business insurance policy.
The good news is, you have different commercial insurance coverage options to choose from that ensure your business is covered.
MYTH #4: Personal Auto Insurance Covers the Cost of Claims During Business Activities
The reality is, a personal auto insurance policy doesn’t include coverage for business use. Therefore, if you are using your personal vehicle for business purposes and get into an accident, your claim could be rejected. This all depends on how exactly you primarily use your vehicle. That’s why having honest communication with your Insurance Broker is vital; they can explain the potential risks to you.
MYTH #5: If You Only Provide Advice, You Don’t Need Errors & Omissions Insurance
If you’re in the business of providing advice and your clients look to you as an expert, you are effectively exposed to potential lawsuits should your client feel your advice impacted them negatively.
Legal defense costs are typically the most expensive component in an Errors & Omissions (E&O) lawsuit, which is why having an E&O insurance policy is extremely essential.
It’s imperative that you are aware of both the importance of commercial insurance and that your particular coverage is suitable for your business needs.
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