Debunking insurance myths – understanding common insurance misconceptions

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Debunking insurance myths – understanding common insurance misconceptions

It’s easy to get confused and caught up in some of the common misconceptions that can fly around when it comes to business insurance. It’s simple for things to be misunderstood, and that’s why we’ve created a quick and easy to follow guide to address some of the common misconceptions that small business owners may encounter when it comes to business insurance.

1. “I run my business from home, so I don’t need insurance”

Recent times have seen a big shift with many small business owners now running their business remotely from home. There are many different types of occupations which take advantage of this freedom from professionals like accountants to online retailers and consultants for example.

The reality is, just because your business is based at home doesn’t mean that things still can’t go wrong. Let’s take a look at some of the types of scenarios and insurance coverages that you may need to consider.

  • You have clients coming to visit your place of business at home- all it takes is for a client to accidentally slip, trip or fall on your premises to injure themselves. This injury can quickly lead to a claim which can have an impact on both your business’ finances and reputation.

This is something that Public Liability insurance* can provide protection for. Public Liability insurance is designed to provide protection for you and your business in the event

a customer, supplier or a member of the public brings a claim against you due to their being injured or sustaining property damage as a result of your negligent business activities.

  • You may store stock for your business at your home business premises. It is a common mistake that many make, thinking that your home contents insurance policy extends to provide coverage for your business stock and contents.

This is not always the case, so it is important that you check with your insurer on the limitations and details of your contents insurance coverage.

A business Contents insurance* policy is designed to provide cover for your business contents or stock if they are damaged in a fire, storm or due to malicious damage or some other defined event listed in the policy.

2. “I don’t need Cyber Liability insurance, I don’t work much online”

In the fast paced, technology driven world, you may be surprised at how cunning and sophisticated cyber criminals are when it comes to causing havoc to small businesses. While you may not operate as an IT guru on have an online based business, if your business has any online connection no matter big or small, you are a target.

Even if you don’t hold large amounts of data, hackers don’t need much to access your systems and cause a potential drama. They can access your systems in the blink of an eye from sending phishing emails and SMS’s to using payment devices like EFTPOS machines to scam customer details.

Cyber Liability insurance* is there to provide some level of protection from the threat of cyber criminals threatening your small business and its online security. It’s an additional measure on top of the usual anti-virus and malware protection software you can take to keep your business safe online.

It covers losses from claims arising from data breaches, business interruption and remediation costs following an actual or threatened data breach.

3. “I only need to talk to my insurer when I make a claim”

Making a claim is something that no small business owner wants to be faced with, and the truth is you shouldn’t have to wait for claim to chat to your insurer.

Take a moment to think about when you first started your business to now, chances are a few things have changed. That’s why it is important to take the time to re-assess your business insurance policies to make sure they are still appropriate to your business and its needs.

If your business has grown with more staff, you’ve purchased more contents/stock, expanded your business premises or offer different types of products and services, you need to make sure that your policy is updated to reflect this.

Chatting to your insurer is an opportunity to get your policy in order and ensure that you have the best protection for your business in place in the event that you needed to make a claim.

4. “My business is too small to need business insurance”

Even if you are flying solo or have a small team, when it comes to accidents and unwanted challenges, no business is exempt no matter how big or small or type of business you operate.

The impact of a claim is often overlooked by many small business owners. Three of the biggest things you need to think about:

  • Your finances – even a small claim could result in potential legal fees, paying compensation if awarded, repairing or replacing contents, being unable to operate your business due to an insurable event or being off work due to an accident or illness.

You work hard to keep your business afloat and the last thing you need is a claim to send your business into turmoil.

  • Your reputation – not having business insurance in place if a claim occurred can cause a damaging dent to your business’ reputation. Something which can have repercussions of impacting your business in the future.
  • The time involved – the actual process of going through a claim can vary, depending on how big the claim may be, and the parties involved. But one thing all claims have in common is that they involve time away from running your business. In more complex claims you may need to go to court, something which can drag on over months or more.

With the right kind of business insurances in place you have some protection to help you get through these challenging times. It means you can get back to what you love doing most without the drama, running your small business.

Got questions about your business insurance? Get in touch with BizCover today for stress-free business insurance, helping all kinds of small business owners.

* This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording.

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