Every business should create a safety cushion to be prepared for the worst case scenario. Just ask any successful business owner out there what the strategy is to creating a sustainable business, and chances are that the answer will be risk mitigation. But why do so many business owners continue to shy away from insurance?
There’s a simple answer to that: myths.
Myths help build traditions and even huge parts of societies. However, they also incite worry and fear, often without reason. We can say the same when it comes to certain business insurance misconceptions.
If you’ve been putting off safeguarding your investment with business insurance because you believe it is ineffective or doesn’t fulfil your needs, allow our clarifications to shed some light on the issue. Here are four common misconceptions about business insurance you should stop believing today:
1 – Business insurance is expensive and won’t provide me with adequate coverage.
Insurance gets a bad rap for being expensive. The truth, however, is that insurance can be an affordable way to safeguard your investment. A business owner’s policy is not very expensive at all and often costs considerably less than purchasing separate policies for each item that needs to be insured. There are also umbrella policies that will cover the rest for an affordable fee.
Remember that even small businesses can get sued anytime for any valid reason. Even if you are not turning a large revenue every month, you are leaving your business vulnerable without insurance. One claim could mean the end of your enterprise and the start of a long road of payments.
2 – Incorporated businesses do not need insurance because there is no personal liability.
Let’s get one thing straight: no business format is foolproof. An LLC or corporation may separate the owner and business’s finances. However, it doesn’t mean you can get away scot-free when your business comes under fire. There are still several instances where a business owner is held personally liable for the results of business gone bad—especially if you’ve signed contracts or taken out loans in your name.
3 – I don’t need workers’ compensation insurance because I’m a sole proprietor.
You may not have a team of employees, but many states require all businesses to carry workers’ compensation insurance. Some—New Jersey, for one—require employees (including sole proprietors) to have workers’ compensation coverage in some way, even if not by a Federal program.
You will need to check the laws in your state to ensure that you aren’t failing to comply with local regulation. Policies will depend on factors such as how many employees you have, how they are classified, and the kind of work or business you do.
4 – Business insurance advisors are a waste of time.
Many business owners believe that buying insurance is just a matter of choosing a policy and signing up. However, the intricacies of insurance can be complicated and one misunderstanding could leave your company vulnerable. Do you really want to stake your investment on what you do (or don’t) know about business insurance?
Professional insurance advisors are trained to understand the unique needs of each enterprise and match them with policies that will cover all their vulnerable points in the worst-case scenario. Seeking a consultation with one will help you understand your needs better and choose the best protection for your business.
Conclusion
Business insurance shouldn’t be an afterthought. Stop believing these four myths and misconceptions; start thinking about safeguarding your company and ensuring it remains sustainable with the help of an insurance advisor. Doing so could potentially save you hundreds of thousands of dollars!
Quesurance Group® is an insurance firm serving Hopatcong and the surrounding areas in New Jersey. We’re here to help you with any concerns you might have regarding small business insurance, whether it’s clearing up any misconceptions or registering for a new policy. Let us help you today!
