As a small business owner, you likely wear many hats from CEO, HR Director and VP of Sales—to just about any other job title you can think of! With so much to do, you may find it hard to research the types of insurance your small business needs. It’s something you have to do, though. The things you’ve heard by word of mouth about insurance may not be true at all, so we’re here to help and dispel a few myths for you.
#1 My small business does not need errors & omissions (E&O) insurance. Errors & omissions (E&O) insurance is professional liability protection for faulty work or negligence, such as bad professional advice. If you provide any type of professional advice, there is potential for you to be sued by a client. What happens to your small business if you are sued without an E&O insurance policy? Without Errors & Omissions insurance protection you will be responsible for the cost of defending yourself in court against any lawsuits. The cost of defending yourself against E&O claims could financially devastate your small business operation.
#2 I am not required to carry workers’ compensation insurance. This may or may not be true. Some states have mandatory workers’ compensation laws even if you are the only employee for your small business. State requirements vary on who does and does not have to carry workers’ compensation insurance. Even if you are not required to carry this type of insurance by your state, it still may be a good idea. Without workers’ compensation insurance, you could be legally/financially liable if an employee experiences a serious work-related injury. Even if you are looking for ways to save on expenses, it may not make financial sense to skip workers’ compensation insurance.
#3 I work at home so my homeowner’s insurance covers my business. A homeowner’s insurance policy only provides limited coverage (at best) for a home business. If you have property/equipment in your home that you use for business purposes, the limited coverage provided by a homeowner’s insurance policy may not be adequate to replace these items. A business owner’s policy can provide the protection you need for a home business.
Sometimes it is hard to tell fact from fiction when it comes to small business insurance. We’re here to help you clear up the confusion and make sure you have the right coverage. Contact us to discuss all your small business insurance needs!