Think your small business doesn’t need insurance? You’re not alone. Many small business owners—especially those working from home or operating solo—believe business insurance is something they can skip, delay or handle later. But that mindset can leave you vulnerable.
From misunderstandings about homeowners coverage to underestimating professional liability, there are plenty of business insurance myths that can create serious gaps in protection. And when an unexpected loss, lawsuit or accident happens, those gaps can be costly.
Let’s break down the most common misconceptions about business insurance, explain what’s really at risk and help you understand what coverage you may need to protect your small business, your income and your future.
MYTH #1: “I run my business out of my home, so my homeowners insurance has me covered.”
Why it feels true: You already pay for homeowners insurance. Your desk is in your guest bedroom. Why would you need anything more?
Why it’s risky: Most homeowners policies offer limited or no coverage for business-related property, liability or operations.
Example: A home-based jewelry maker stores thousands of dollars in inventory and ships through online orders. After a pipe bursts, their workspace is damaged and materials are destroyed. The homeowners policy may not provide enough coverage.
Even client visits can be a problem. If a customer visits your home and trips on the porch, you could be liable—and without a business liability policy, you could be at risk for paying out of pocket.
Takeaway: If you run a business from home, you likely need a home-based business endorsement or a separate business owners policy.
MYTH #2: “It’s just me—I don’t need insurance.”
Why it feels true: You’re not hiring employees. You don’t have a storefront. It’s low risk, right?
Why it’s risky: Even solopreneurs can be sued. If your advice, service or product causes financial loss or injury, you could be held legally and financially responsible.
Example: A freelance IT consultant sets up a system for a small firm, but a misconfiguration leads to a data breach. The client sues for damages. The consultant has no professional liability coverage and the legal costs alone are overwhelming.
Takeaway: If you provide services or expertise, errors and omissions insurance can help protect you—even if you’re a one-person business.
MYTH #3: “I don’t have a storefront, so I don’t need property coverage.”
Why it feels true: No physical location, no problem, right?
Why it’s risky: Property insurance isn’t just for buildings. If you have tools, equipment, inventory or even a mobile work setup, you could still experience loss.
Example: A wedding florist operates out of a converted garage, storing fresh blooms, vases and a commercial cooler in the space. A power outage knocks out the cooler overnight and thousands of dollars in perishable flowers are ruined just days before a major event. The florist assumes her homeowners insurance will cover the loss—but because it involves business property, the claim is denied.
Without commercial property insurance or equipment breakdown coverage, she’s responsible for replacing the inventory out of pocket—and managing disappointed clients without the resources to recover quickly.
Takeaway: If you run your business from home or a nontraditional space, don’t assume your personal insurance will cover your business property. Whether it’s a cooler, a laptop or custom inventory, commercial property insurance helps protect the tools and materials your business depends on. If you rely on any equipment to operate—especially perishable or high-value assets—equipment breakdown coverage can also help you recover faster when the unexpected happens.
MYTH #4: “I’ll wait until I’m more established.”
Why it feels true: In the early stages, cash is tight and insurance feels optional.
Why it’s risky: New businesses are often at greater risk because they’re still building financial reserves, processes and client relationships. One unexpected loss can cause a major setback or even force closure.
Example: A small catering startup experiences a kitchen fire that damages rented space and delays upcoming events. Without property and liability coverage, they’re paying for repairs and refunds out of pocket.
Takeaway: Insurance helps you recover faster and builds credibility with clients and partners early on.
MYTH #5: “Business insurance is too expensive.”
Why it feels true: Premiums feel like one more bill until you need the coverage.
Why it’s risky: The cost of a single claim—from a slip-and-fall to a data breach—can far exceed the cost of a policy. Small business policies are more affordable than you think.
Example: A mobile auto detailer keeps supplies and tools in his work van. After a break-in overnight, thousands of dollars in equipment is stolen. He didn’t think insurance was worth the cost until replacing everything cut deep into his savings and forced him to cancel jobs for at least a week.
Takeaway: One unexpected loss can cost more than a year of insurance premiums. Business insurance helps protect your tools, income and reputation—often at a cost that’s flexible and manageable for small businesses.
Insurance isn’t just for “What if”—It’s for “What now?”
Business insurance isn’t about being afraid of what could go wrong. It’s about having a plan for what comes next, so you can recover quickly, meet your obligations and keep your business moving forward.
The right coverage is about more than paperwork. It’s peace of mind that helps preserve your way of life when something unexpected interrupts your routine.
If you’re unsure what your current policy covers—or if you don’t have business insurance yet—a local Erie Insurance agent can help.
Contact a local ERIE agent today to start the conversation. We’ll help you understand your options and make sure your business is covered—now, and as it grows.
