5 Preconceived Ideas about Small Business Insurance That You Should Ignore

watering can pouring water green plantRunning a small-scale company is no easy task. Since most owners have a lot on their plate, they often neglect the crucial importance of elements that could make the difference between prosperity and bankruptcy, like small business insurance. This type of policy proves its utility in different unpleasant, unexpected situations. For instance, errors and omissions insurance could enable you to avoid the costs associated with a lawsuit filed by a client who is not satisfied with your work.

General liability insurance would allow you to cope with medical bills and any other expenses reported by people who got injured on your premises. The right type of coverage is basically a mix of policies that beneficiaries can customize based on their specific needs, budget limitations, business profile and other unique requirements. If you don’t know much about small business insurance, rely on expert guidance to identify and personalize the best type of coverage for you. Whatever you do, don’t make a final call based on the 5 common preconceived ideas listed below.

1)      You Don’t Have to Buy E&O Insurance to Protect Yourself Against Frivolous Claims

If you provide expert advice, it is highly recommended to protect your good name and your business by investing in errors and omissions (E&O) insurance. You may think that you don’t need this type of policy because you are one of the best players in your field. Even so, one or more clients may still think that your consulting services are the main reason why their company is not going in the right direction.

Let’s assume that you are a marketing consultant. You could come up with a growth plan that enables the client to increase his ROI over the course of 5 weeks. The customer could engage in counterproductive practices that could reduce his ROI. By the end of your collaboration, he could report a ROI inferior to the one recorded before hiring you as a consultant. Obviously, it wouldn’t be your fault, since the client didn’t follow your specific indications, but you could still get dragged to court and a potential lawsuit could still ruin your image and make you lose money. Therefore, even if you do you are a respectable consultant, you should still think about investing in a E&O policy, as at some point you may be forced to deal with one or more frivolous claims.

2)      You Don’t Need to Spend Your Money on Worker’s Compensations If You Are the Business Owner and the Only Employee

Some states, including Utah, New York and Nevada require you to invest in worker’s compensations, even if you are the only employee hired by your company. In other states, worker’s compensation requirements vary based on your employee count, how your staff members are classified and also based on their job description. To avoid mistakes and omissions that could get you into a lot of trouble, let an insurance agent shed some light on this matter.

3)      Those Who Work at Home Do Not Need to Buy Business Insurance

These days, more and more people decide to try their luck as freelancers. They start their own business from scratch and usually don’t need a real office, so they choose to work from home to save some money otherwise spent on office space rent. Does this mean that freelancers do not need to invest in small business insurance? Of course not! There are several risks that should be taken into consideration. For instance, they could accidentally destroy their laptops while they are flying to meet a client. Moreover, expensive personal equipment could be stolen from their cars during their business trips.

These are only two examples illustrating the most common worst-case scenarios that could disrupt the balance of a home-based business owner. The list of risk factors is basically endless. To eliminate major threats, all business owners are advised to opt for a business owner’s policy or a general liability coverage, which could ensure an ideal level of protection for the beneficiary in any given set of circumstances.

To make an inspired decision when it comes to purchasing insurance, rely on Insurance Quote Depot to compare small business insurance rates by zip code. Afterwards, spot the most popular insurance companies in your area and schedule an appointment with an agent.

4)      Your Umbrella Policy Can Get You Out of Any Kind of Trouble

Umbrella policies can help you cope with the unexpected in different situations. Nonetheless, this doesn’t mean that this particular type of policy keeps all risks at bay. On the contrary, umbrella insurance policies come with a long list of exclusions and limitations, so make sure you read the contract multiple times to find out what’s covered and what’s not. Don’t sign on the dotted line unless you understand every single detail related to your insurance policy.

5)      If You Get Sued You Can Just Close Your Business to Avoid Major Losses

If your negligence or your wrongdoing has made your clients lose money, you may want to get ready for a very lengthy, costly lawsuit. Some business owners consider shutting down their company, thinking that their action could help them avoid a harsh sentence. The bad news is that this last ace up your sleeve has no value in this game. The judges don’t really care if your company is operational or not. If you are found guilty, you have to cover the client’s prejudice. In case you don’t have enough money in your bank account to cover the losses, you could be forced to sell your personal assets to come up with the amount of cash that you will have to give back to your former client.

All in all, the optimal small business insurance policy can bring you peace of mind, forming a solid barrier against major risks. Wondering how much it could cost you? If so, all you have to do is to surf the Internet and compare small business insurance rates by zip code. Do it now to avoid unpleasant surprises that could threaten your financial independence

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