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Tuesday, 21 September 2021

Debunking Insurance Myths for Small Businesses

Written by May A.
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There are multiple myths online that surround the insurance industry, but debunking insurance myths for small businesses is almost like a walk in the park. For small businesses who have a lot on their plates, these myths may go unnoticed without delving deeper into them.

This list would definitely help you in deciding on the best coverage while maintaining everything on your budget. So if you're one of those small businesses that wants to know more, then by all means, scroll down! 

Myth 1: Insurance Is Not A Necessity For Small Businesses

Just because you’re running a small business does not mean you don’t need insurance. Big or small, all businesses are prone to risk. It’s just in the process of how you choose the coverage suited for your type of business.

Myth 2: Getting Insurance Is Too Expensive For A Small Business

Again, every insurance and its coverage is customizable to your needs. If your business only has a few employees and is not in a high-risk industry (such as construction), you can save some costs on the premium of your workers’ compensation insurance by tweaking some of the coverage. 

More than that, it is essential to recognize that although business insurance is not free, the money you will spend on it will be worth it. To illustrate clearer, let’s list down some accidents and mishaps that could potentially drain the financial reserve of your small business if you don’t have insurance.

  • A customer slips in your store and breaks a hip
  • A calamity, say a tornado, wrecks your property
  • One of your staff breaks his arm while packing your stocks during inventory
  • A pandemic forces your store to close its operation for an imperative amount of time

These may be hit or miss scenarios, but the picture is clear―without insurance to protect your small business from these things, it might face unforeseen consequences, or worse, potential bankruptcy. So, the best thing to do is find a coverage fitted to your business and budget.

Myth 3: Hackers Are Not Interested In Small Businesses, So Cyber Liability Insurance Is Unnecessary

Small companies are disproportionately affected by cybercrime, either because they are unaware of the threats and believe that hackers would not threaten them or because they lack the resources to execute a solid protection plan.

Being hacked, infected with malicious malware, or otherwise being a victim of cyber-crime puts your computer networks at risk, but it also exposes your staff and customers to other crimes and threatens your company's integrity.

Cyber liability insurance protects you and your company against internet-based liabilities and threats, including confidential consumer data, credit card numbers, Social Security numbers, driver's license numbers, account numbers, and health records. A separate coverage, property insurance, could help cover the cost of a stolen computer.

Myth 4: Sole Proprietor Businesses Do Not Need Workers’ Compensation Insurance

Although this might be true for many, some states still require workers’ compensation insurance. So, even if you’re the sole employee of your business and you run it all by yourself, it is still imperative to check if the state you’re in requires this type of business insurance.

One of the best ways to find out is to talk to a trusted insurance agent to confirm and clarify the provisions regarding this coverage. Our agents are readily available to help you with this. You can speak to one of them by dialing (818) 649-2267.

Extra: US Department of Labor states the general overview of its mandate on workers’ compensation insurance across different industries.

Myth 5: Small Business Contractors Do NotNeed Property Insurance Coverage

While it’s true that online small businesses might not benefit much from property insurance, a small business contractor that mainly deals with a clientele surely has to have this coverage. 

Why? Let’s paint a picture. Say you were contracted by a client to work on their home (perhaps for a small renovation), and you accidentally damaged a part of the property. The client might sue you or come after you for that. And if you don’t have property insurance, that would mean money coming out of your pocket to bear the cost of repair. 

Myth 6: Home-based Small Businesses Do Not Need Business Insurance

Some small business owners may think that because they work at the comforts of their home and have home insurance, they don’t need to get business insurance anymore. Well, let us tell you that it is not always the case. 

Most home insurances do not cover business-related damages that happen in a home-office setting. More than that, if your business involves constant traveling (like meeting with a client or supplier), you won’t be covered when an accident happens to you while on the road.

Myth 7: An Umbrella Insurance Will Cover Everything For Small Businesses

Not to be strict with the use of terms, but technically, umbrella insurance does not cover everything. For the sake of clarification, umbrella insurance is more comprehensive coverage that provides additional liability security for claims and litigation brought against your company. 

Read over your contract or contact your agent to be sure of what are and are not included in this coverage.

Avail Your Coverage From Us

Did you learn from our attempt in debunking insurance myths for small businesses? Were we successful in helping you decide to choose the best coverage for your business? Well then, avail your insurance from us now!

Logos Insurance Services is an all-inclusive insurance brokerage firm serving the needs of commercial companies and small business individuals.  As one of Southern California's fastest-growing commercial insurance companies, we have appointments in a number of states and can write commercial policies throughout the country.

Call us at (818) 649-2267 for more information on how Logos Insurance Services can help keep your small business covered and safe from any accidents and mishaps.

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