6 Costly Business Protection Myths for Advertising and Media Professionals
Here are six misconceptions that owners of ad agencies, graphic design firms, marketing firms, and other media services companies often have about business protection. To avoid exposing your company to undue risks, make sure that you don't believe any of the following myths…
- Having a business automatically protects you from personal liability
- Hackers won't target your small business.
- Small businesses are less susceptible to being sued.
- Small businesses that don't have full-time employees don't need Workers' Compensation Insurance.
- You already have personal car insurance and don't need commercial auto insurance.
- You don't need insurance because many of your co-workers are friends and family.
Truth: Owning a Business May Not Protect You from Being Personally Liable
You've set up your advertising, graphic design, or media business to protect you from personal liability. But it doesn't always work out that way. Depending on the circumstances, you can still be help personally liable for the actions of your company. This is called "piercing the corporate veil," which is appropriately scary-sounding.
Even if you've carefully set up your corporation, limited liability company, or other entity, lawsuits may be able to target your personal assets. Luckily, business insurance can help prevent a lawsuit settlement or judgment from gaining access to your personal assets.
Truth: You Must Protect Against Cyber Crime: Cyber Liability Insurance
Recent studies have shown that hackers are much more likely to target small businesses than larger ones. In fact, cyber criminals target small-business websites and networks because of the size of their business. Small businesses tend to be less protected and less likely to notice a breach in their security.
Having Cyber Liability Insurance helps protect you and your clients' data. In addition, this insurance will help your company in case of an expensive lawsuit. Ignoring this growing threat could cost you tens of thousands of dollars in legal fees, damages, and money you have to spend rebuilding your brand and customer goodwill.
Truth: Small Businesses Are Not Less Likely to Be Sued
Your marketing agency, advertising business, or design firm is not less likely to be sued just because it's small. Lawsuits can occur anywhere in any circumstances. Even if the stakes seem small and you're not making the revenue of a major corporation, a lawsuit itself can be prohibitively expensive.
This is precisely why small businesses need General Liability Insurance and other policies. Should one of your employees develop a case of carpal tunnel syndrome, for example, your business might not be able to afford the medical expenses, lost wages, legal fees, court costs, and settlements that often follow.
Truth: You May Need Workers' Compensation Insurance
It may sound crazy, but even if you have no employees, or are your only employee, you may still be required to purchase some level of Workers' Compensation Insurance. Regulations on Workers' Comp vary tremendously from state to state. Some states allow sole proprietors to opt out of Workman's Comp, but others may still require it. Our agents will quickly help you navigate these confusing regulations.
Truth: Personal Car Insurance Does Not Equal Commercial Auto Insurance
If you crash your car while making a delivery of new marketing or advertising materials, you may assume that you're covered by your Personal Auto Insurance. But that's not necessarily true.
Many Personal Auto Insurance policies exclude coverage for any driving you do commercially. Contact one of our agents today and we'll help you figure out whether your current insurance is sufficient or you need more coverage.
Truth: You Still Need Insurance Even if You Work Mostly with Friends and Family
You're a small-business owner and likely have a close-knit network of friends and family who chip in on your projects. You may think that this means you don't need insurance. You can trust your friends and family not to sue, right? Maybe. Policies like General Liability Insurance, Workers' Compensation Insurance, and others will protect you regardless. The worst can, and does, still happen even if you are working with friends and family.
Furthermore, a policy like Workers' Comp will help protect your friends and family should they be injured while helping you out. That will save you and your friends from having to pay expenses medical bills.
Our agents will be able to help you sort fact from fiction when it comes to your insurance. Contact one today.