There are often many misconceptions regarding small business insurance, especially when it comes to whether or not existing personal insurance policies protect your small business against potential claims. To help clarify what is and what isn’t covered, here are some common business insurance myths demystified. We have also included a few other ‘top’ myths, which are worthy of being debunked!
1. MYTH: Your Home Insurance Policy Will Protect Your Home Business in the Event of a Claim.
Don’t make the assumption that your existing home insurance policy will cover your home-based small business in the event of any type of claim; it won’t. Although your existing home insurance policy may offer very limited coverages, and may even give you the option of purchasing an extension for your business, it is highly recommended to get a separate policy for your home-based business so that you are properly covered in the event of a claim.
2. MYTH: You Don’t Require Additional Insurance Coverage If You Use Your Personal Vehicle for Work Purposes.
This really depends on how you primarily use your vehicle and what type of usage your auto insurance policy is based on. If your auto insurance is rated for personal use only and you got in an accident on route to a regular delivery for work, you may run into issues getting your claim covered. It is important to note that personal auto insurance policies may automatically exclude coverage for vehicles while being used for business purposes. You should always talk to your insurance broker if you are going to be using your vehicle for work, and determine whether or not you need to change your rate class or purchase a commercial auto policy.
3. MYTH: Damage Caused by a Flood Is Automatically Covered by Your Business Insurance Policy.
First, keep in mind that ‘flood’ refers to the overflowing of a body of water, which is different then regular water damage (for example, a sink overflowing) or sewer back up. Coverage for flood damage is not a standard insurance coverage, even under what’s commonly referred to as an ‘All Risk’ policy. Flood is purchased as a separate add-on coverage to your policy and comes with a higher deductible then your other coverage. The cost for flood coverage on a business insurance policy is usually minimal, but it can be more if you are in a high risk flood zone. Make sure to check your policy or ask your broker to be sure you are covered for flood damage.
4. MYTH: Small Businesses Should Always Look for the Best Deal.
Purchasing the ‘best deal’ or cheapest insurance premium may mean that your business is not adequately protected for all potential risks. As premiums are calculated based on the exposures a business faces and the coverages it needs, buying a policy based on the lowest premium provided is not necessarily a good thing. Always be sure you are getting the coverage you need, while not blowing your budget; Bullfrog can help you with that.
5. MYTH: Using A Broker Will Add a Huge Additional Fee to Your Premium.
This is a common misconception. Insurance brokers work on your (the clients) behalf to find your business the best rate based on your small business’ needs. Rather than get an insurance quote from just one insurance carrier, brokers are able to provide you and your business with quotes from multiple carriers. You also get to use the brokers expertise in ensuring your are getting the right coverage that your business needs.
If you have any questions regarding the information above or if you would like to discuss your current policy with a broker, our Bullfrog Insurance brokers would be happy to help you out. Bullfrog Insurance also offers affordable insurance coverage on tools, equipment and materials. Contact us today for more information.