Myths about Commercial/Business Insurance
Commercial insurance is complicated, and decisions regarding what insurance to buy and whether to assert or pursue an insurance claim frequently are based on false assumptions about what risks are covered. Below is a list of the most common misconceptions regarding commercial liability insurance.
Myth No. 1 Not all businesses require insurance.
Truth: Businesses may not be required to have insurance, but it should be part of their overall risk management plan. Insurance is intended to help a company or business get back on its feet following a loss. Without it, many businesses fail and never re-open their doors. By simply paying a small premium for a larger limit, insurance allows business owners the confidence and freedom to take calculated risks to grow and prosper.
Myth No. 2 My business doesn’t make a lot of money or have lots of assets. I won’t be sued. Truth: Lawsuits can happen to any business or person. Monetary judgments have many ways of being collected including seizure of property and assets, garnishment of future earnings, liquidation of bank accounts and more. Make sure you have coverage to protect your current and future earnings from potential liability.
Myth No. 3 I set up a corporation, I am 100% protected. Truth: Facts what they are, a corporation protects the officers and owners from actions or damages against the corporation. However, that corporate shield can be pierced or even stripped and a business owner held liable personally. A business and its owners are legally liable for any action that hurts others. Even if a company is incorporated, owners can be sued personally for their own actions in the company. They risk losing their personal assets and perhaps even their home if a liability lawsuit against them is successful. Without doing a case study, the smaller and newer the corporation, the more likely this could happen.
Myth No. 4 Nothing will happen to me. Truth: This is a big one, it sometimes sounds like, “If something happened to me the business will take care of my family.” Most businesses don’t survive the death of a principle. Often, the business is dissolved to pay off obligations. This leaves the family and the employees of the business devastated. Have an exit strategy and contingent plan in place and fund it through business insurance.
Myth No. 5 It’s cheaper to buy all of your business insurance products from the same company. Truth: Chances are you’re going to need a wide range of coverages to protect your business. Depending on what kind of work you do, you might need everything from commercial vehicle insurance and general liability to workers’ compensation. While it might be easier to buy all of these products from the same company, you could save big bucks by buying your policies from separate providers. Shop around to find the best deal, or ask your local agent for quotes from multiple companies.
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