When you’re running a small business, insurance isn’t something you likely think about very often, and it’s not something you want to deal with. However, the reality of it is that insurance can be something that saves your business from ruin in the event of an accident or disaster outside of your control. For small businesses, there can be several misconceptions about your insurance needs and why it’s still important, even if it seems like a waste of money. We want to point out some of these misconceptions and straighten them out.
General Liability Insurance
General liability insurance protects a business in the instance that someone other than an employee is injured or has property damaged because of your company. This is one of the most common types of business insurance, but it’s not the only type of policy your business will need. You’ll want to check with your insurance agent about any other types of necessary coverage.
Workers Compensation Insurance
One common misconception is that if you don’t have any employees or if you only have a couple, you don’t need workers compensation insurance. This can also be the case if your business doesn’t involve something you think is dangerous. However, this isn’t always true. If your business has three or more employees, Arkansas legally requires you to have workers compensation insurance. Obviously there are certain exceptions. In fact, there are some smaller businesses that still require workers compensation insurance. To find out whether or not it’s required for you, you’ll need to ask your insurance agent.
Homeowners Insurance for Home-Based Businesses
If you have a home-based business, it can be easy to assume that your homeowners insurance will cover any business-related claims that arise because it’s based in your home–this isn’t necessarily the case. Any claims related to your business are likely not covered under your standard homeowners policy. Business equipment that’s damaged will probably not be covered, and any business claims that occur outside of your home will definitely not be covered under a homeowners policy. To determine what your needs are relating to this, you can talk to your insurance agent about whether you are able to add a special endorsement to your current homeowners policy, or will need a separate liability policy for your business.
Business Liability Insurance if Incorporated
If your business is incorporated, whether through a C Corp or an LLC, it can be a common mistake to assume that you no longer hold any personal liability. This isn’t true. Being incorporated does separate you from your business, creating different entities, but both you and your business can be separately liable without proper liability insurance. If an accident happens, someone could still sue you personally and also sue your business. With the proper liability insurance, you’re able to protect against something like this from costing your business money, or financially ruining you personally.
Business Insurance Costs
One of the most common misconceptions and beliefs about business insurance is that it’s too expensive and not worth the investment. The most important thing to understand is that it doesn’t have to break your bank account. We know that when starting out, small businesses generally try to pinch pennies, and for good reason. However, there are ways to save a little bit of money on business insurance if you have an insurance agent looking out for your best interests. For instance, look into a business owners policy. Typically this type of policy is a bundle, and will include general liability insurance, property insurance, and business income insurance. By bundling these three important policies, you are normally able to save some money. It’s much better to have the insurance you need in place before you need it.
Without proper coverage, certain claims could cause your business to go bankrupt. We recommend talking to your insurance agent not only about any ways you could save money, but to also make sure that your investment is going to benefit you in the long run.
Commercial Auto Insurance
Many people think that if they drive their own car for any business-related travel or transport, your personal auto insurance will cover any claims you may have. However, similarly to home insurance, if you are in an accident while doing something business-related, even if it’s as small as going to a business lunch, it’s possible that your personal coverage won’t cover the accident. This is where commercial auto insurance can be beneficial. If you are doing a lot of transport or travel for your company, you’ll want to look into whether or not you need commercial auto insurance.
All of these things mentioned above are things M&P Insurance can assist you with. If you have questions about your business insurance needs or just want to make sure you have the proper business coverage, M&P is happy to help. Feel free to give us a call at 870-523-6771, or drop by our office in Newport at 105 Laurel St. As an Arkansas business, we are always happy to help other Arkansas businesses, whether you are just starting out or have been around for a while.