Few events in one’s lifetime are as exciting as opening a small business. From having the freedom of being self-employed to using one’s own talents to generate profit, there are many advantages. However, if you are thinking of starting your own business, it is wise to understand the pitfalls as well as the rewards, such as the errors new business owners make regarding their business insurance. As you build your business, learning a few insurance myths can help you manage your business with more efficiency and avoid errors that may cost you time and money.
- My Business Is Not Big Enough To Require Insurance
You might think of your business as a small entity that does not need insurance. However, thinking small can cost you, especially if you run a business out of your home and a client gets hurt while on your property. Even if you have homeowners insurance, some providers may not cover your business, so you may find yourself paying for any accidents or disasters out of pocket.
- Additional Insurance Is Too Expensive
While it can be difficult to finance a small business, especially when you first start out, it is unwise to cut corners when it comes to buying business insurance. The risk of paying out of pocket if anything should happen often far outweighs the cost of policy premiums. You can get business insurance through a variety of providers, and their representatives can help you find a policy that is affordable, no matter the nature of your business.
- My Homeowners Coverage Will Protect My Business
This is a myth that can cost you dearly, especially if you store any inventory or supplies in your home. In case of a fire or flood, many insurance companies cover only the building, not what is inside it. For example, if you have a custom jewelry business you run from home, your supplies, machinery, and stock are not likely to be covered with basic homeowners insurance. It is a good idea to ask your provider about whether they offer business insurance or if you can extend coverage to protect your business.
- My Auto Insurance Covers Business Use
If you use your car for business purposes but have not insured it for that reason, you may be running a large financial risk. You may need an additional policy for your car, even if you only use it a few times a week to deliver orders, take packages to the post office, or meet with clients. If any business-related items are stolen from your vehicle while you are using it for work, they will likely not be covered by your existing policy.
Some auto insurance providers provide bundled insurance packages that may help you save money if you want to cover your car and home under your business name. Ask your insurance agent about bundling opportunities that can help protect you and your growing company.
- I Do Not Need Insurance That Protects My Technology
Business technology is growing and some business moguls that started small, such as telecommunications executive Peter Foyo, grew their companies by understanding the importance of protecting their data from cyber-attacks. Even small businesses are vulnerable to such issues, and chances are the cost of suffering such an attack can cause your business to fold.
Investing in cybersecurity insurance can protect clients personal information, your business data, and other sensitive material. For example, if your company suffers a data breach, cyber coverage would likely cover any losses you or your customers might suffer. Otherwise, you would be responsible for costs that might soar into the thousands of dollars.
No matter what type of small business you choose to open, protecting it and your best interests with business insurance can be a wise choice. From protecting your home and car to your client’s private information, breaking through insurance myths and discovering the truth about proper coverage can make your burgeoning business a success.