Marketing and management consultants rely on their business insurance plan to safeguard company assets and to protect their business from costly lawsuits. However, as you search for the appropriate policies, you may be surprised by the amount of misinformation about business insurance. And without the facts, you could sign on for a policy that leaves your business open to risks. Read on to learn the truth behind some of the most pervasive myths about business insurance and the information you need to make wise purchasing decisions.
Management & Marketing Consulting Business Insurance Myths Busted
As a marketing or management consultant, you have experience helping other businesses succeed. But if your business isn't protected with adequate business insurance coverage, one professional negligence lawsuit can be enough to bankrupt your consulting practice. If the court rules against your company, both your business and personal assets can be collected to pay the settlement. That's why it's imperative to know the facts about business insurance and the risks you face if you don't have any coverage. To make sure your business protection plan is built on solid information, take a look at the most common business insurance myths.
Myth #1: "If I'm sued, I'll just close my business. You can't come after what no longer exists!"
Unfortunately, this is not a reliable business protection strategy. If you are sued and your business is found liable, you could still be responsible for paying the costly court settlement out of pocket if you don't have the appropriate business insurance. And closing your business has little to no effect on the outcome of a case. Simply because you don't have many business assets doesn't mean you aren't collectible. You could be required to cover settlements or judgments with your personal assets if your business assets are not enough.
Myth #2: "I have a good rapport with my clients. I don't have to worry about being sued."
Though an open line of communication with your clients is an essential part of customer service and managing projects, your business could still be sued. An Errors and Omissions-related lawsuit against your business may not even be a reflection of the work you've performed, but rather, a reflection of your client's false expectations. If you don't have adequate coverage and your client sues your business for professional negligence, the court costs, settlement expenses, and lawyer fees will have to be paid out of pocket. Because most small businesses cannot bear that kind of expense and still continue their services, your business can only stand to benefit from carrying Professional Liability (Errors and Omissions) Insurance.
Myth #3: "My marketing / management consulting business is too small to need an insurance policy."
Whether you own a consulting business with twenty employees or you are a one-person operation, your business benefits from proper protection. Business insurance is designed to ensure your business can withstand an unexpected financial loss and still continue to operate. In the event of a costly lawsuit or natural disaster, you can rest assured your business will have the means to pay expensive legal fees or replace damaged equipment. Plus, when you work with a trusted insurance agent, you can purchase policies that are both affordable and protect your business from your industry's most prevalent risks.
Myth #4: "I have an Errors and Omissions Insurance policy, so I'm protected enough."
For marketing and management consultants, Errors and Omissions (E & O) is an invaluable asset to a business protection plan. However, that policy will not "fully cover" your business. For example, if you're hit with a claim for a third party's injury on your business premises, you would need a General Liability policy to cover the event. Because exclusions and coverages vary from policy to policy and carrier to carrier, your best course of action is to work with an insurance agent you trust and know what your policies cover.
Myth #5: "Business insurance doesn't fully cover you, so it's not worth the investment."
When it comes to business insurance, some is always better than none. Consider that in a costly court battle, having a policy that offers even some compensation is better than receiving no funds at all. Today, you can typically find an affordable business insurance plan that covers most of your financial needs in the event of a covered claim. For example, a Business Owner's Policy bundles General Liability and Property Insurance together, offering your business coverage for legal fees and damaged property. If your consulting business is sued or a fire destroys your office and all your equipment, business insurance tends to be a small price to pay for the millions it could offer in coverage. And when you work with the insurance experts at insureon, you can even tailor your policy to include the specific coverages your business requires.
Myth #6: "My office is small and safe. I probably don't need Workers' Compensation coverage."
Even though consulting businesses are typically considered low-risk work environments, you never know when an accident might happen or a repetitive motion injury will set in. Because office employees tend to work at their computers all day, they could develop lower back strain, eyestrain, and carpal tunnel syndrome. Your business could be financially responsible for any medical expenses related to their work injuries if you don't carry Workers' Compensation Insurance. Additionally, your employees could sue your business, claiming your failure to provide a safe work environment caused their ailments. To boot, even if your workplace is equipped with ergonomic office furniture, your state may still require you have Workers' Comp coverage for your W2 employees. The good news is that this coverage offers funding for legal fees to defend your business in court if an employee sues, and it also covers medical expenses and your employee's lost earnings while they recover.
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