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You are at:Home»Finance»10 business insurance myths debunked

10 business insurance myths debunked

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Posted By sme-admin on February 19, 2025 Finance

When you’ve just started up your small business, it can be easy to think you won’t need insurance. After all, you’re only a small business – what’s the worst that can happen? But, many business owners think they don’t need insurance and get caught out when they least expect it.

In fact, 44% of business owners in the UK have no commercial insurance, and 47% of these say that their business is “too small” to take out a policy. But, as an SME, it’s crucial to separate fact from fiction to protect your hard work.

A new guide from the business insurance experts at Bionic which debunks the top 10 myths about business insurance for small businesses. 

  1.  I don’t need business insurance if I’m a sole trader 

“Many sole traders think their personal finances are sufficient enough to cover any unexpected accidents. However, operating without business insurance exposes you to a whole host of risks that could threaten your personal assets, such as one of your employees injuring themselves on a piece of faulty equipment that hasn’t been fixed. Having the right insurance in place can protect your finances and give you peace of mind while you manage the day-to-day.”

  1.  My business has been running for years – I don’t need insurance now  

“Long-standing businesses are often more visible and have bigger reputations, which can attract more attention if something goes wrong, increasing your exposure to potential claims. New risks can also rear their heads, like changes in regulations or market conditions or even something out of your control like extreme weather damaging your business – which only seems to be becoming more common.”

  1. Business insurance is too expensive for small businesses 

“Working with a broker, like Bionic, means an in-house insurance team working with a panel of trusted insurers who can tailor affordable insurance options to meet the needs of your business and get you the right deal. Spending a bit of money on insurance can save you from hefty costs down the line — so think of it as a safety net for your business’s financial health.”

  1. I don’t need insurance if my business is online 

“Cyber threats, such as hacking and data breaches, are on the rise, with 50% of UK businesses reporting cyber attacks or security breaches in the past year. And without insurance, you could face devastating financial repercussions. Cyber insurance is designed to help you manage these risks, covering the losses from a cyber attack and helping your business recover as quickly as possible. And remember, as an online business, it’s important that you’re offering safe online shopping to secure and retain your customers.”

  1.  If I have a home office, my home insurance covers my business equipment 

“It’s a common misconception that home insurance covers working from home or any business equipment used in a home office. Most standard home insurance policies have specific exclusions regarding business use – this means that if your equipment is damaged or stolen, you could be left without proper cover – but it’s always best to read the small print or get in touch with your insurer.”

  1. I can wait until my business grows to get insurance 

“ The earlier you secure the cover you need, the better protected you’ll be against potential risks– even the smallest of small businesses need insurance! . Getting your insurance sorted early on sets a solid foundation for your business, leaving you equipped to handle any challenge that comes your way.”

  1.  Insurance will cover everything 

“It’s important to remember that no policy covers every possible scenario.  Each insurance policy has specific terms, conditions and exclusions that outline what is and isn’t covered. Taking the time to read your policy carefully and discussing it with your insurer will help you get to grips with the extent of the policy.”

  1. I’m covered by my client’s insurance 

“Client policies may only cover their liability and not extend to your business operations. It’s so important to make sure you have your own insurance in place for complete protection of your business activities.”

  1. Only businesses that rely on technology need cyber insurance 

“Every business, regardless of its size or industry you operate in, can be a target for cyber threats. Whether you handle sensitive customer data or financial information, you’re still at risk of cyberattacks.”

  1. If I don’t claim, my premiums will also be low 

“While not making a claim on your insurance policy may influence your premiums, it’s not the only factor at play. Insurers assess different elements, including what type of business you run, your claims history, where your business is located and how risky you are to insure. Regularly reviewing your policy and being open with your insurer can help identify ways to manage and potentially reduce your insurance costs, but this isn’t always a given.”

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