Considering how important business insurance is, it’s surprising how many people still don’t understand it. Every business needs the right insurance coverage but a lot of business owners make mistakes because they are following bad advice. There are a number of misconceptions about business insurance that trip people up, and if you run a business of your own, you need to avoid the same mistakes. These are the common business insurance myths you need to stop believing.
Home Insurance Covers Your Home Business
One of the most common mistakes is assuming that your homeowner’s policy covers anything and everything that happens in and around your home. That includes damage to your equipment, supplies, and everything else you use in running your business. This myth has led many people into financial trouble because their insurance doesn’t cover their business.
Homeowners insurance cover ends as soon as you engage in business activities. So, if you run a business from home, you need a dedicated business policy.
Your Business Insurance Will Always Pay Out
Another myth about business insurance is that it always pays out if something goes wrong. It’s easy to think this, but the truth is that you need to pay your premiums regularly or your insurance won’t cover any claims people make against you. Businesses struggle for lots of reasons, and that can leave you with unpaid premiums on your business policy. That means no payout during an emergency which could be even worse for your business than having no insurance at all.
In some cases, your insurance company will deny your claim, even if you have paid your premiums. They might argue that the specific situation is not covered by your policy or you didn’t provide accurate information. If you think that their denial is unlawful, you should contact some experienced insurance claim attorneys and challenge the decision. However, you might not have a case if you broke the terms of your policy. Either way, be prepared for the eventuality that your business insurance might not pay out.
General Liability Insurance Covers Everything
Your general liability policy will cover bodily injury and property damage that happens to other people as well as damage to their property. So, if someone slips and falls on your premises and breaks something, your policy will cover the cost of fixing the damage they have done. It also covers them for medical expenses resulting from their injuries.
However, this type of insurance has some major limitations because it only covers direct losses caused by accidents that happen on your premises or during business activities. Unfortunately, a lot of people think that general liability is a blanket insurance policy that covers them against everything. But, in reality, there are a number of different insurance policies you need to cover your business against every eventuality. Things like income protection insurance, vehicle insurance, and contents insurance are all crucial too.
Make sure that you don’t base your insurance decisions on these common myths or you will end up in hot water when you need to make a claim.
(Cover Image Source: Pixabay)