Insurance for small businesses can be complex, so finding the right type of insurance policies for your business can be a challenge. The matter is made even more complicated by the existence of numerous insurance myths, making the decision process even harder. To ensure that your business is well protected against any future claims, it’s important to identify these myths, so that you can make the right insurance choices for your business.
Here are six myths about business insurance that need to be busted.
1. General liability insurance is a one-size-fits-all solution
Whilst general liability insurance gives you a good overall coverage, it doesn’t cover everything. This insurance policy is designed to provide protection against outside litigation, such as injury, accident or property damage from a third party. It does not cover customer litigation when their private information is hacked from your database or claims by your employees if they are injured at work or are wrongfully dismissed.
2. You don’t need commercial vehicle insurance if you already have personal vehicle insurance?
It is always important to read the terms and conditions of your own car insurance policy, your insurer should always be made aware you are using your vehicle for Commercial use and not personal. This means that if anyone who is employed by your company (including yourself) has an accident while driving their own vehicle for business purposes, it is possible that an insurance company won’t pay any claims.
3. Insurance advisers/brokers get paid so much it puts up the premiums
Premiums are dependent on many factors, but not on the income of insurance advisers/brokers. Premiums are calculated on the basis of what the insurers are insuring, what they are exposed to and the risk factor in providing the insurance. Insurance advisers/Brokers take a percentage of cost for the work efforts in negotiating the relevant cover, the work does not end here and in the event of a claim your adviser is there to support you and your business. Your expert adviser will always confirm their fees while doing business with you.
4. Small businesses don’t need insurance
This is a strategy that can quickly lead to financial loss, because it doesn’t matter the size of your business, disaster can still strike. In fact, small businesses have a much more difficult time recovering from the financial challenges of litigation than larger companies, simply because they don’t have the financial resources to recover successfully.
5. My business is too small to be attacked by hackers
This myth is one you can’t afford to believe. Many hackers actively target small businesses, because they don’t have adequate security systems in place to protect their data. Most small businesses don’t have the resources to recover successfully from a cyber attack and 60% don’t ever recover, closing their doors within six months of a data breach occurring.
6. Home insurance protects home-based businesses
This is a dangerous myth believed by many home based business owners. Some insurance providers don’t cover home based businesses, so if you work from home and haven’t informed your provider, your home insurance might be voided if you make a claim. It’s important that you inform your provider that your residence is also your place of business, otherwise you might not be covered if the worst happens.
To decide what type of insurance policies are suitable for your small business, talk to an insurance specialist today.
General Advice Warning
The information provided is to be regarded as general advice. Whilst we may have collected risk information, your personal objectives, needs or financial situations were not taken into account when preparing this information. We recommend that you consider the suitability of this general advice, in respect of your objectives, financial situation and needs before acting on it. You should obtain and consider the relevant product disclosure statement before making any decision to purchase this financial product.