The internet is awash with bad advice, especially when it comes to business insurance. Everyone and no one is an expert, and it can be hard to find legitimate, useful information that you can rely on.
That’s why, to help you out, we’ve rounded up the worst pieces of advice you could ever get about your business insurance. Beware and avoid at all costs.
1. "You don’t need business insurance if you work from home"
Many people think that their standard home and contents insurance covers business activities undertaken in their home office, practice or studio. Unfortunately, that’s usually not the case.
A home-based business is just like any other business, so you need separate business insurance such as:
- Public liability cover for clients, customers or suppliers who visit your business at home;
- Workers’ compensation for any employees you may have working from your home
- Professional indemnity insurance if you provide services or advice to clients
It’s also important to consider business interruption insurance, which will protect your business if you’re unable to trade for certain reasons. You can learn more about small business insurance here.
2. "Insurance is not worth the money"
This is a really dangerous piece of advice, but it’s one that (unfortunately) many people believe. According to the Insurance Council of Australia, one of the main reasons why small and medium-sized businesses don’t take out insurance cover for known risks is cost.
But here’s the thing: an insurance policy is cheaper than the cost of losing your office to a fire or flood, and you spend less on insurance than you’d lose if you experienced business interruption or fell victim to a cyber-attack. There’s a strong business case for insurance and it’s not worth risking your business or your livelihood to save a few dollars.
Extra tip: there are ways to save money and get a better deal on your insurance. Learn how here.
3. "You don’t need an insurance broker"
Unless you’re a seasoned insurance professional, you really shouldn’t be trying to organise your company’s insurances without at least a little bit of help from a broker. Why? Here’s a few reasons:
- Insurance policies are full of unintuitive industry jargon that you might not fully understand. An insurance broker is like a translator: they can use their deep technical knowledge to help you understand terms and policies.
- Policies can vary wildly in scope and wording. An insurance broker is best placed to help you navigate the myriad of policies available to you, and they can recommend the best ones for your business.
- You have limited budget to work with. If you’re working with limited funds, an insurance broker may be able to save you money by negotiating a more competitive price with your insurer on your behalf.
Learn more about how an insurance broker can help you here.
Where to get good insurance advice
You (hopefully) wouldn't take medical advice from someone who isn't a medical practitioner, and your attitude towards your insurance should be no different. You should always seek out advice from your insurance broker, or another insurance industry professional, before making any decisions about your insurance.
Many insurance professionals answer questions on Quora too, if that helps. We've shared the common questions and answers here.
Have you ever received any bad advice about your business insurance? Join the conversation and share it with us - we'd love to help you set the record straight!