Running a Main Street business means wearing a lot of hats. From sales and operations to HR and accounting, insurance often falls to the bottom of the to-do list. But misunderstandings about business insurance can leave owners exposed to serious financial risk.
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In a recent episode of The Accel Advantage Podcast, host Corey Rekers sat down with Rachel Lee, Director of Commercial Lines for Accel’s Premier Business Unit (PBU), to break down the most common small business insurance myths and explain what coverage business owners actually need. After all, Rachel grew up in a family-owned construction business and treats every client like family. To start, she shared some striking statistics from Next Insurance:
- 69% of small business owners struggle to understand their insurance policies
- 13% don’t feel adequately protected against risk
That confusion isn’t surprising. Many small business owners don’t have time to become insurance experts, and they shouldn’t have to. That’s where trusted insurance advisors come in.
Myth #1: General Liability and Remote Work
This is one of the most common misconceptions, especially since many businesses shifted to home-based operations during the pandemic.
The truth:
General liability insurance isn’t just for storefronts or offices. It covers:
- Bodily injury to third parties
- Property damage caused by your work
- Products & completed operations
- Personal and advertising injury
Tune in to the episode for some real-world and industry-specific examples.
Myth #2: Cyber Liability and Payment Information
Many business owners assume partners like Square or PayPal absorb all cyber risk.
The truth:
Even if a third-party vendor processes payments, your business is still the data owner. If customer information is compromised, clients come to you, not your processor.
Cyber liability insurance can help cover:
- Data breaches
- Ransomware attacks
- Malware and phishing scams
- Social media hacks (including fraudulent ads and impersonation)
In the full episode, Rachel shares which industries may be at higher risk for cybercrime.
Myth #3: Commercial Auto and Company Vehicles
Even without company-owned vehicles, your business may still face auto liability.
The truth:
If employees:
- Use their personal vehicles for work errands
- Rent or borrow vehicles on behalf of the business
You may need Hired and Non-Owned Auto Liability coverage.
Why it matters:
If an employee causes an accident while on company business, lawsuits often name both the driver and the business, even if personal auto insurance is involved.
Myth #4: Workers’ Compensation and 1099 vs. W2 Employees
Rachel has seen this misconception cost contractors thousands of dollars in surprise audit bills.
The truth:
Misclassification is a significant issue. If a worker:
- Only works for you
- Follows your schedule and instructions
- Doesn’t carry their own general liability insurance
They may legally be considered an employee, regardless of 1099 status. With inadequate coverage, you can end up with large audit bills, so Rachel shares best practices to avoid a headache.
Myth #5: Professional Liability and Bad Advice
Rule of thumb: “General liability covers what happens around your work. Professional liability covers the quality of your work.” – Rachel Lee
Industries that often need professional liability include:
- Consultants
- Contractors
- Medical professionals
- Mechanics
- Veterinarians
- Cosmetologists
- Financial and marketing professionals
- …and many more!
How To Work With the Premier Business Unit
If you’re a small business owner and want a no-pressure insurance review, Rachel is happy to help. Shoot her an email at pbu@acceladvantage.com or get a quote.
Listen to the Full Podcast Episode
For more tips and to hear the full conversation, check out The Accel Advantage Podcast on:
- Spotify: Listen Here on Spotify
- Apple Podcasts: Listen Here on Apple Podcast
- YouTube: Listen Here on Youtube
- Your favorite platform and anywhere you get your podcasts (Amazon Music, iHeartRadio, etc.)
Don’t forget to subscribe, leave a review, and share the episode with a fellow business owner who could benefit!
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