Independent contractors, home-based and part-time business-owners all need comprehensive small business insurance coverage

Small businesses are the cornerstone of the American economy. Per U.S. government data, there are nearly 28 million small businesses in the United States, collectively employing tens of millions of employees around the country. The U.S. government defines a small business as one with less than 500 employees– but most small businesses are much smaller than that.

While many small businesses with more than 100-200 employees have extensive insurance coverage, many ‘smaller’ small businesses, with 1-20 employees, often don’t have the coverage they need. That leaves them vulnerable to threats including disasters, illnesses, accidents, lawsuits, and governmental fines. Here are common myths about small business insurance:

1. If I work alone or from home, I don’t need any insurance

A whopping 52% of American small businesses are home-based. One of the benefits of opening a home-based business is reduced overhead expenses, but even tiny, home-based business owners usually need to have business liability insurance. These policies can fund legal defenses and pay for damage claims if any product you or your company produces or service that you render is alleged to have caused injuries or damages to a third party.

2. Liability insurance is the only kind of insurance a small business needs

While liability insurance may the most important insurance policy for business owners to buy, especially if they operate a very small business, it’s far from the only insurance policy most small business owners need. Small businesses often need property insurance (if they own their own office building), renters insurance (if they rent or lease an office building), commercial auto insurance (for company vehicles), data breach insurance, among other kinds of coverage. In addition, your business may need more than one kind of liability insurance. In addition to general liability insurance for injuries and damages. professional liability insurance, otherwise known as errors and omissions insurance, may be required to insure against damage a client may have accrued due to a mistake on a business’s part.

3. As a business owner, I’ll have to buy all my small business insurance policies separately

Many insurance providers offer business’ owner policy (BOP) insurance packages. These products often include a combination of business interruption insurance, liability insurance, vehicle insurance coverage, crime insurance, and property insurance. Businesses can usually tailor a specific package of insurance policies to meet their business’s individual needs. Purchasing a BOP package can be an efficient way for businesses to save time and money while getting the comprehensive coverage they need.

4. You don’t need to have workers compensation insurance for employees unless you’re a huge company

Workers compensation policies vary greatly between individual states, so make sure to check on your state government’s website to examine your state’s specific policy. Some states, like Arizona, require “all public and private employers with at least one employee” to acquire workers comp policies, while Florida requires employers with at least four employees to buy a policy. It’s essential to stay up-to-date on the workers comp insurance laws in your state, as violating them could result in lawsuits, serious fines, and reputational damage for your firm.

Do serious research before purchasing insurance for your small business

Every small business is different, and that means that every small business has different insurance needs. Smaller, home-based businesses may only need three or four simple policies, while larger ‘small’ businesses may need ten or more comprehensive policies.

While it’s usually better to over-insure your business than to under-insure it, you don’t want to waste money on coverage you don’t need. That’s why you should research to make sure you make smart choices when it comes to purchasing insurance before making any big decisions that you might regret.

Congo {Democratic Rep} To learn more about how to make smart insurance decisions for yourself, your family, and your small business, contact the experts at Avante Insurance today for a free consultation.