Small business insurance comes in many forms, and with so many factors and considerations to keep in mind, there are many business owners who find it challenging to get the right coverage for their operation. That’s completely understandable, especially since there are several insurance myths that make the process even more difficult. Getting to know what some of the most common myths are and the truth about business insurance can help business owners immensely.

1. Home-Based Businesses are Protected by Home Insurance

While more information about business insurance is available at, this is a myth that far too many people believe. Unfortunately, a homeowner’s insurance policy only covers the home.

While it may provide some coverage and can let business owners get add-ons for their business, it’s best to purchase real business insurance. This allows the business owner to purchase a policy that addresses the home business’s needs and that ensures the operations are going to be protected.


2. All Risks are Covered by General Liability Insurance

General liability insurance coverage isn’t a one-size-fits-all solution for operation-related risks. While it offers comprehensive coverage, remember it won’t provide protection for all claims that arise.

Usually, general liability insurance is to protect business owners from any lawsuit filed by someone who isn’t an employee. This means business owners have protection if there’s an accident or injury that occurred on the premises if there is property damage or reputation damage.


3. Workers’ Compensation Insurance isn’t needed if the Business Doesn’t Have Employees

While this may be true in some situations, it’s not always the case. The location of the business plays a role in determining if this is the situation. Each state has different regulations and laws resulted to this insurance. Sometimes, even a sole proprietor has to purchase workers’ compensation coverage.

4. Flood Damage is Covered by Existing Insurance Coverage

Some believe their business is protected from flood damage with their existing insurance coverage. This usually isn’t the case because the “flood” an insurance policy refers to is damage resulting from a problem with the sewers or an overflowing sink. Not all insurance is going to cover actual flood damage.

It’s a good idea to get flood protection as an add-on to another business insurance policy. This is especially the case if the business is situated in a location that’s at a high risk of floods.

5. No Additional Insurance is Needed when Personal Vehicles are Used for Business Purposes

Vehicle insurance for personal vehicles isn’t always going to cover situations where autos are used for business purposes. If the insurance is for personal use and something happens when the vehicle is being used for a business purpose, the claim may not be approved.

To make sure that complete coverage is provided, it’s a good idea to consult with an insurance agent and to clarify what is covered, along with what is excluded if personal vehicles are used for business tasks.

Business Insurance Coverage

Getting the right insurance coverage for any business is vital to its ongoing success. It’s a good idea for business owners to review the information here to ensure they get the coverage needed to protect their business if an issue occurs. Being informed is the best way to ensure the right business insurance coverage is purchased for any business, regardless of size or industry.