Business owners have a lot on their plates. Not only do they have to run their business, they also have to make sure that it is protected correctly in the event of a loss. There are a number of myths surrounding business insurance you should be aware of. Take look at some of the most common myths below to assist you in understanding your commercial business policy. Please note: Every insurance policy is different and this article is intended for information purposes only and should not be taken as advice. Be sure you confirm details of your policy with your specific insurance provider.
Myth 1: Your home insurance policy will protect your home based business in the event of a claim
Fact: Many business owners believe that their house or property insurance will automatically cover their home-based business in the event of a loss. Unfortunately, this is not the case. Your personal property insurance covers just that; your personal property. If you have a home office, meet with clients at your house, or you store business equipment in your home; make sure you let your insurer know so you are properly covered.
Myth 2: You don’t require a commercial automobile policy if you use your personal vehicle for work
Fact: Similar to Myth 1, your personal automobile is for personal use, not necessarily for business use. If you are using your personal vehicle for business purposes, such as carrying work equipment, meeting with customers, driving clients or for other business purposes, you must notify your insurance provider. They may be able to amend your current policy to allow for business operations, or write you a separate commercial automobile policy if it is required.
Myth 3: My Business is to small and therefore does not need its own policy
Fact: No business is too small to profit by the additional security of business protection. Commercial insurance policies can offer a wide range of coverages such as liability, business interruption, coverage for the building, coverage for the business equipment and even coverage for the products you sell. It is important to keep your business protected against theft, lawsuits, disasters and a number of other losses that may affect your business.
Myth 4: My business insurance policy covers me for any type of loss I suffer
Fact: There is a common belief that if you have a commercial business policy, all losses are covered. This is untrue. Similar to your personal property insurance policy, there are a number of key exclusions to commercial policies. There is no policy which covers everything. Since each policy is different, with different coverages, endorsements and exclusions, it is important to read over your policy and ask questions if there is something you do not understand.
Myth 5: Since my landlord has an insurance policy, I do not need my own
Fact: While your landlord should have a commercial business policy for the building itself, this does not cover your belongings. It is important you insure your stock (items you sell to clients), business equipment and any improvements or betterments you have made to the space you rent. You should also obtain a business policy for liability coverage.
Myth 6: The tenant renting my building has obtained their own insurance so I don’t need a policy
Fact: It is good practice to require tenants that rent your commercial space to obtain their own policy. However, the policy they obtain should be in addition to yours. Tenants will obtain a policy that covers their interests: their equipment, stock and improvements and betterments they make. However, as the landlord, it is your responsibility to insure the building and your liability as a building owner.
Myth 7: There is no insurance to cover my lost income in the event of a claim
Fact: Many businesses that suffer a loss will sometimes have to temporarily close in order for the necessary repairs to be completed. Sometimes, this can be for a few days, a few weeks, a few months, or even longer. When a business relies on the day to day sales and operations, a loss like this can be affect the stability of the business. Business interruption insurance is available for just this. It provides coverage for loss of income as a result of an insured loss, up to a specific amount. It can be purchased to prevent business owners from suffering a severe financial loss while the business is being restored after a claim.
There are a number of different commercial package policies available to insure a number of different business needs. It is important to review your policy and determine if the current coverages meet the needs of your business. If you are worried you do not have the proper coverages, contact us and we would be happy to help!