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6 Common Business Insurance Myths Busted

IA South West

Jul 01, 2019
Views: 1151

Business Insurance

If you own a small business, you might not have all the insurance cover you need. There's a lot of myths circulating in the business world about insurance; if you buy into them, you can very quickly put your business in jeopardy.

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.

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

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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 me today.

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General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

All information above has been provided by the author.

Gail Findlay, IA South West, AFSL 240549