Several myths surround business insurance for small businesses. While it can be a little confusing when you first go through your business insurance policy, things will become clear if you allow your agent to go over your policy with you and explain the details. The more you understand your policy and how it works, the better off you will be, especially when it comes to filing a claim or making changes to your policy in the future.
Homeowners Insurance Covers Home-Based Small Businesses
Your homeowners policy does not always cover home-based businesses. If you have a designated office area in your home and equipment that is used solely for the operations of your business, you must purchase a Business Owner’s Policy or some type of commercial coverage to protect your company’s finances.
All Types of Risks Are Covered Under General Liability
General liability does not cover all risks associated with your business. It does not cover product liability or any work-related injuries you or your employees receive. It will also not cover any accidents involving vehicles or equipment owned by the business. General liability covers third-party bodily injury and property damage within your business premises. It also covers damage to reputation. There are many types of liability involved with owning a business. It’s up to you to know your risks and ensure that you are fully protected.
No Workers’ Comp Is Needed for Sole Proprietors
Even if you don’t have employees, you will need to have some type of insurance in place for you. Some states require business owners who choose not to carry workers’ Comp insurance for themselves to sign a waiver and have some type of health insurance in place.
Business Insurance Covers Damage by Flooding
Standard insurance policies do not cover flood damage. Water damage that is covered in your policy does not include damage by flooding. If you live or work in an area that is prone to flooding, you will need to purchase a flood policy that will protect you from this type of risk. You will need to discuss this type of policy with your agent to determine if it is needed and how much coverage you should purchase.
Personal Auto Coverage Extends to Personal Vehicles Used for Business
You will need to purchase a supplement policy if you use your personal vehicle for your business. Many auto insurance policies will not cover business-related items that may be damaged if you use your car for business purposes at the time of the accident. Having business coverage ensures that you are properly covered.
Property Insurance is Not Needed If You Work at Your Client’s Property
Even if you work at your client’s home, you still maintain your business at home or at an office location. Also, you must have the right amount of property insurance to protect your tools and inventory. A Business Owner’s Policy will protect you in this situation.
Insurance Brokers Are Expensive
Insurance brokers are not as expensive as you think. When you are dealing with business insurance, you will want an agent or broker who offers multiple options. Working with a broker will open up many different policy options that will allow you to choose the right policy for your business.