Do you rely on your personal insurance policies to cover your small business? This is very common with small business owners, especially home business owners. However, it can be a very large risk, and when you have to make a claim, you can find yourself uninsured or under insured I know that researching insurance is not on the top of your list of fun things to do, but a few minutes now can save you from ruin later.
Most owners make the same few common mistakes. They rely on personal policies, or they do not give it much thought at all! But you probably do not carry a personal liability policy, beyond the liability in your homeowners policy. That is intended to protect you if some visitor trips over your kid’s toys or suffers another injury. It is not intended to protect you if a customer makes a liability claim against your professional service or product!
Another common mistake is using a personal car insurance policy to protect your vehicle while on business use. You may have stated lower limits on mileage than you are really putting on your car these days. If you took out your policy before you started your company, and said your minivan was only used for grocery shopping, you could have an issue. Now, if you are involved in an accident, and you were using that same minivan to make deliveries, you could give an insurance company a reason to deny the claim. Even if they accept the claim, they may not be eager to cover the thousands of dollars worth of flower arrangements or packaged meals that you have in the back. You should look into a commercial vehicle policy, or at the very least, see if you can get a business rider attached to your old personal policy.
Another mistake is using your homeowners policy to cover all of the business assets you have stored in your home. Your property contents limit may only be a few thousand dollars, or enough to replace your furniture and tv sets. But your business can use other equipment like computers, fax machines, or other special machines. Besides, you probably have business documents that will be expensive, if not impossible, to replace. If you lose the records of money people owe you, for instance, you could be ruined.
And of course, you must consider your business liability. In our society, people are quick to sue. Even if you are totally innocent, you still need to pay for legal defense and take your time to attend to a claim. Many businesses have been ruined even though they were found innocent of any damages because they could not afford the time and cost of a legal defense. If you have liability insurance you will have an insurance company on your side! You really need to consider your risk and think about some sort of coverage.
Of course, other types of businesses need specialized insurance policies beyond the common types. A few minutes spent looking into proper coverage can save your business. Do you want to risk running a business with no coverage?
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Article Author :Marilyn_Katz
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