Business insurance is a must in today's climate, but many owners don't understand the basic ins-and-outs of this type of policy, including why it's necessary, what it covers, and how to get the right coverage for yourself and your business. Here are five common myths about business insurance, and the myth-busters that you need to know.
Myth 1: You don't need business insurance unless you have employees
Truth: Whether you're managing a staff of 5 or 15, or you're just a one-man or woman show, having business insurance is a necessity for every serious business owner. Many of the risks that come with entrepreneurship simply are not covered by your regular homeowner's insurance. And if you're an independent contractor in a high-risk industry, like contracting, you most certainly will need specialized coverage in order to protect yourself and your clients.
Myth 2:A basic policy is all you need
Truth: For a few business owners, this may be the case. But every business is unique: some may rely on extremely valuable equipment or inventory, others may deal in sensitive data, and still, other types of businesses might come with a higher risk of getting sued. It's important that you understand the ways in which a standard policy will or won't work for your singular business and situation. Then, you can work with an independent insurance agency - like us - on the best ways to fill in the gaps.
Myth 3: You can forgo an auto insurance policy if you or your employees are using their own vehicles
Truth: Whether you have one or several designated business vehicles or not, having an auto insurance policy is a necessity if you or your employees are driving in order to conduct business. Your regular auto insurance policy likely won't cover accidents or injuries that occur during the course of doing business, so don't neglect this important coverage if it applies to what you do.
Myth 4: Business insurance is extremely expensive
Truth: In fact, the opposite is true: business insurance can be extremely affordable, and is a small price to pay to protect your livelihood and a company you put your heart and soul into building. A well-rounded insurance policy will give you peace of mind so you can pursue your dream without worry.
Myth 5: Sole proprietors don't need to purchase worker's compensation insurance
Truth: It's true that in some states you can file for an exemption so that you are not required to purchase worker's compensation insurance, but that doesn't mean it's the best thing for your business. In certain situations, if you or any independent contractors you work with get injured, guess who could be on the hook? Your clients. A savvy customer or contractor may want you to have worker's comp insurance before working with you, so be sure to know your industry and what will be expected, if not required.
For any business insurance questions, call or contact Wilson, Timmons & Wallerstein, Inc. today.