Accessibility Tools

Kerrville, Tx: 830.896.2400   Comfort, Tx: 830.995.2700

Do you believe everything you hear about insurance when talking to fellow business owners? If so, you’ve probably been privy to—and maybe even regard as true—a few small business insurance misconceptions. Consider the following common mistaken beliefs to avoid.

Insurance companies never pay on claims.

While a common belief—everyone’s friend of a friend allegedly knows someone whose insurance company failed to pay up—it’s patently untrue. Your small business insurance policy is a contract. If that contract specifies certain types of damages caused by certain types of situations are covered, the insurer has to honor its obligations. Don’t let this misconception prevent you from investing in the insurance your small business needs.

Only big businesses need insurance.

If big companies were the only ones facing lawsuits, dealing with data breaches, or incurring damages in floods and fires, the belief might be true. But it’s not. According to Forbes, 71 percent of cyber-attacks are on small businesses. And according to the Federal Emergency Management Agency (FEMA), nearly 40 percent of small businesses affected by natural disasters never reopen. You can bet a tornado or hurricane doesn’t care how many people you employ.

If I’m incorporated, I don’t need business insurance.

While a LLC (or limited liability company structure) can limit your personal liability by legally distinguishing you from your business, it doesn’t eliminate all potential danger. An angry customer or client could still try to bankrupt your company with a lawsuit. Should he or she succeed, you’d be left to start over at square one—unless you have appropriate small business insurance.

Small business insurance is too expensive for my budget.

Sure, every small business insurance policy requires you to pay a premium for coverage. But that expense is minuscule when compared to what you may have to pay out of pocket if a lawsuit or natural disaster strikes. You could lose your livelihood, your company’s savings, even your own personal assets all because you didn’t buy appropriate coverage. Keep in mind, you can bundle policies to reduce your premium costs. Risk management plans can also help you keep premiums low.

My single business insurance policy covers everything.

Chances are good that it does not. No single policy will cover every situation or loss. The only way to ensure full coverage is to purchase multiply policies designed to cover different types of liability (such as property insurance, equipment insurance and business-interruption insurance). Give us a call today to talk about your small business risks and ways to build adequate coverage.

vjustice (142)