When it comes to business insurance, it’s easy to become perplexed and caught up in some of the usual misunderstandings. It’s easy for things to be misunderstood, which is why we’ve put together a brief and simple guide to clear up some of the most frequent misconceptions that small business owners may have about business insurance.
1. “I don’t need insurance because I conduct my business from home.”
Many small business owners are increasingly operating their businesses remotely from their homes, which has resulted in a significant shift in recent years. Professionals such as accountants, internet retailers, and consultants are just a few examples of occupations that benefit from this flexibility.
The truth is that just because your business is run from your house doesn’t mean things can’t go wrong. Let’s look at some of the many circumstances and insurance coverages you would need to think about.
- You have clients coming to see your home-based business; all it takes is for one of them to slip, trip, or fall on your property and have an injury. This injury can swiftly escalate into a claim, affecting your company’s money and reputation. This is something that can be covered by Sole trader insurance*. Public liability insurance is meant to protect you and your company in the case of a lawsuit.
- When a client, supplier, or member of the general public is harmed, or their property is damaged as a result of your neglectful business operations, they may file a claim against you.
- You can keep inventory for your firm at your home office. Many people make the mistake of believing that their home contents insurance policy covers their company goods and belongings as well. This isn’t always the case, so make sure you double-check the limitations and terms of your contents insurance coverage with your insurer. A business Contents insurance* coverage is meant to protect your company’s contents and stock in the case of a fire, storm, intentional damage, or other defined disaster listed in the policy.
2. “I don’t require Cyber Liability insurance because I don’t conduct a lot of online work.”
You might be shocked at how cunning and sophisticated cyber thieves are when it comes to wreaking havoc on small businesses in today’s fast-paced, technology-driven society. While you may not be an IT genius or run an online-based firm, you are a target if your company has any kind of online connection, no matter how minor.
Even if you don’t save a lot of data, hackers don’t need much to gain access to your systems and cause havoc. They can quickly get access to your networks and send phishing emails and SMS messages, as well as use payment devices such as EFTPOS machines to steal client information.
Cyber Liability insurance* exists to provide some protection against cyber thieves posing a threat to your small business’s online security. It’s a precautionary measure in addition to using anti-virus and malware protection software to keep your company safe online.
It covers losses resulting from data breach claims, as well as business interruption and remediation costs in the event of a real or threatened data breach.
3. “I only need to contact my insurer if I need to file a claim.”
Making a claim is something no small company owner likes to do, but the truth is that you shouldn’t have to wait until a claim is filed to speak with your insurer.
If you reflect back to when you initially started your business and where you are now, you’ll notice that a few things have changed. That is why it is critical to review your business insurance coverage to ensure that it is still appropriate for your company’s needs.
If your company has grown by adding more employees, purchasing more contents/stock, expanding your business premises, or offering various sorts of products and services, you must amend your policy to reflect these changes.
Speaking with your insurer is an opportunity to review your policy and verify that you have the best protection for your business in case you need to file a claim.
4. “I don’t need business insurance because my company is too small.”
Even if you’re flying solo or with a tiny crew, no business is immune to accidents and unwelcome obstacles, regardless of how big or little or what type of business you run.
Many small business owners underestimate the consequences of a claim. Three of the most important items to consider are:
- Your finances – even a minor claim could result in legal bills, compensation payments, content repairs or replacement, inability to operate your business owing to an insurable incident, or time off work due to an accident or illness. You work hard to keep your company afloat, and the last thing you need is a lawsuit to throw everything into disarray.
- Your reputation — failing to have business insurance in place in the event of a claim might damage your company’s reputation. Something that has the potential to negatively damage your business in the future.
- The time commitment — the time it takes to process a claim varies based on the size of the claim and the parties involved. All claims, however, have one thing in common: they need time away from your business. In more complicated cases, you may need to go to court, which might take months or even years.
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If things don’t quite go according to plan, insurance policies can give you some peace of mind you have some protection in place to help you get through any trying times. It means you can get back to doing what you enjoy most, running your small business, without the drama.