Business Insurance Myths Debunked
As a business owner you often must be an expert in all things regarding your business. From sales to marketing, graphic design to bookkeeping - there's a lot to get your head around! We've spoken to IAG, Australia's largest general insurer about business insurance.
Myth 1: My Business is too small to get insurance
It isn’t about your revenue, the number of employees, or the square footage of your storefront. You might want to consider your exposure to risks arising from your business. Risk comes in many forms, like a fire that destroys your inventory, theft of the company car, or a customer suing you over their experience with your product, service, or advice.
Myth 2: General Liability Insurance covers everything
General liability insurance is designed to protect your business against claims resulting from accidents or injuries that occur as result of your business activities, as well as accidental damage to property owned or controlled by someone else. For example, your general liability policy may cover you if the floor in your shop is wet and a customer slips and hurts themselves. However, there are quite a few circumstances in which general liability insurance will not apply. It may not apply if you get sued if you provide incorrect professional advice. It might not cover your property if it is damaged, destroyed or stolen.
Myth 3: My Home andContents Insurance is the same as my business insurance
You might have started a home-based business, but your insurance company may consider your home and your business as two completely separate risks… because they are. Home based businesses may have risks that aren’t always covered under a home and contents and insurance policy, or may not be covered in full because the policy has exceptions or maximum caps on claims.
Myth 4: Cheaper is better for insurance
When you’re running a business, it’s understandable that you may want to cut costs where possible, and a lot of people think that saving money on insurance is a great way to lower overheads. Although a cheaper insurance policy may be worth considering, make sure you review the policy wording to ensure you’re getting the cover that you need. If you discover down the track that your insurance doesn’t cover you at claim time, it could cost your business some serious money. Be sure to check that your cover is right for you.
Myth 5: My Subcontractors have their own Insurance so we’re always safe
Generally, if a subcontractor you hire has insurance, it will only cover their own liability. For example, if something happens, like your subcontractor damages a client’s property, and you are held liable for all or part of the damage, your liability may not be covered. Further, if you hire a subcontractor, they may not be insured under your insurance policy like your staff would be.
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