10 Common Business Insurance Myths Debunked

When it comes to protecting your business, misinformation can lead to costly mistakes. Many business owners believe they don’t need business liability insurance or that it’s too expensive—leaving them vulnerable to risks. At Pelican Shield Insurance, we’re here to set the record straight. Let’s debunk 10 common myths about business insurance.

Myth #1: Small Businesses Don’t Need Insurance

Reality: No matter the size of your business, unexpected accidents, lawsuits, or property damage can happen. Even a home-based business can face liabilities from clients, vendors, or cyber threats. Business liability insurance helps safeguard against these risks.

Myth #2: General Liability Insurance Covers Everything

Reality: General liability insurance is essential, but it doesn’t cover employee injuries, professional mistakes, cyber threats, or property damage. Depending on your industry, you may need additional policies like workers’ compensation, errors & omissions (E&O), or cyber liability insurance.

Myth #3: Business Insurance Is Too Expensive

Reality: The cost of not having insurance can be much higher. A single lawsuit or property loss can put you out of business. Pelican Shield Insurance offers customizable plans to fit your budget while ensuring adequate coverage.

Myth #4: My LLC or Corporation Protects Me from Lawsuits

Reality: While forming an LLC or corporation separates personal assets, it doesn’t shield your business from lawsuits. If a client sues your business for negligence, business liability insurance can cover legal fees and settlements.

Myth #5: Home-Based Businesses Are Covered by Home Insurance

Reality: Most homeowners’ insurance policies exclude business-related claims. If you run a business from home, you need a home-based business policy or an endorsement to ensure coverage.

Myth #6: Cyber Insurance Isn’t Necessary for Small Businesses

Reality: Cybercrime is on the rise, and small businesses are prime targets. A data breach can cost thousands in damages, legal fees, and lost customer trust. Cyber liability insurance helps protect against these risks.

Myth #7: Employees Using Their Own Vehicles for Work Are Covered by Personal Auto Insurance

Reality: If employees use their personal vehicles for business tasks—like deliveries or client visits—their personal insurance may deny claims. A commercial auto insurance policy ensures proper coverage.

Myth #8: A Business Owner’s Policy (BOP) Covers Everything

Reality: While a BOP bundles general liability and property insurance, it doesn’t cover everything —such as professional liability, cyber risks, or employee-related claims. You may need additional coverage depending on your industry.

Myth #9: If My Business is Low-Risk, I Don’t Need Insurance

Reality: Every business, regardless of risk level, faces potential threats— slip-and-fall accidents, lawsuits, or even reputation damage. Insurance helps mitigate financial loss from unexpected events.

Myth #10: I Can Buy Insurance and Forget About It

Reality: Business risks evolve, and your insurance should too. Regularly reviewing and updating your policy ensures that your coverage keeps pace with your growth and changing risks.

Protect Your Business with Confidence

 

Now that these myths are debunked, it’s time to ensure your business is properly protected. Pelican Shield Insurance offers tailored business liability insurance solutions to keep your company secure. Contact us today for a personalized quote!