by | Small Business, Uncategorized |

Small business owners have a lot to manage. With so many bases to cover, it’s easy enough to let important details slip through the proverbial cracks. When it comes to small business insurance, making certain assumptions about “small details” can lead to large financial losses. That’s why we’re taking a look at the top three myths many small business owners tend to believe—until it’s too late!

Myth: “My Umbrella policy has it covered”

Despite its name, an umbrella policy isn’t a catchall. Personal and business umbrella policies extend liability coverage to help protect assets if the costs of a claim exceed the amount covered by the underlying policy. If you’re thinking that an umbrella policy “covers everything,” you may need to take a step back and consider what’s actually covered by your umbrella policy as well as your primary insurance to ensure you have the breadth of coverage you need to protect you from the most common and costly losses. For most small businesses, this includes coverages such as: Small business insurance protection graphic

  • Commercial property insurance
  • General liability insurance
  • Workers’ compensation insurance
  • Business auto insurance
  • And yes, “umbrella” liability insurance

Make sure to speak with your insurance agent about coverage options that might be appropriate for your type of small business and industry. Construction companies, transportation companies and retail businesses, for example, have unique coverage needs that are served by more specific forms of insurance. To set your small business up for success—and to reduce your potential losses—think beyond the umbrella and consider specialty risk products, too.

Myth: “My business is too small for cybersecurity risk”

Chances are that your company has a website and that you store digital customer information on local or remote servers. Even if you’re not offering ecommerce functionality or casting a wide digital footprint, your business data isat some degree of risk. Your systems, however small, are penetrable. If they are found in the wrong hands, and if you are without appropriate insurance coverage, your business could face significant losses. 

Yes, you are at risk even if you’re a small business. In fact, the U.S. House of Representatives Committee on Small Business reports that approximately 40% of all cyberattacks are focused on companies with less than 500 employees. Only 14% of small businesses, however, report having a plan in place for keeping their company cyber-secure. Read What Small Businesses Need to Know About Cybersecurity in 2019 for more statistics and helpful information.

Your small business cybersecurity plan should include talking to your agent about purchasing privacy breach and cyber liability coverage as part of your liability coverage. Additionally, you should be aware of the things you and your employees can do to safeguard your assets, both physically and digitally. You should also be ready to take action with the proper authorities if and when you suspect an invasion of your data or systems.

Learn more in How to Help Protect Your Business from Privacy Breaches and Cyber Crime.

Myth: “My employees drive their own cars, so I don’t need business auto insurance”

Most personal auto insurance policies do not cover losses that incur while a vehicle is being used for business purposes, especially when a car is used primarily for personal use. It is important that you, as the business owner, and your employees know what your personal policies include and exclude. Make sure to talk with your agent about getting sufficient commercial coverage.

There are advantages to commercial auto insurance  such as coverage for rental vehicles, telematics and GPS equipment, and even auto loan/lease gap coverage. And remember, without it, your business could be held financially liable in the event of even a minor accident when the vehicle is being used for business purposes.

Unfortunately, certain assumptions about small business insurance can keep a business owner from getting the coverage he/she needs. If and when you’re faced with a loss—and it’s an uncovered loss—you’ll wish you had talked with your insurance agent sooner. To find an insurance agent near you, visit our agent locator.

Acadia Insurance is pleased to share this material with its customers. Please note, however, that nothing in this document should be construed as legal advice or the provision of professional consulting services. This material is for general informational purposes only, and while reasonable care has been utilized in compiling this information, no warranty or representation is made as to accuracy or completeness.

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