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Managing a business is a lot more than just standing behind a counter and ringing people up. No matter your industry, there’s a ton to consider with regard to making your company as safe and successful as it can be. One such consideration is insurance, a fairly crucial element in not being left destitute if some sort of accident were to befall your store.

Too often, however, businesses just don’t have the proper insurance to deal with these major issues. In this regard, one of the cardinal sins a business owner can commit related to insurance is trying to use personal insurance to cover their company. There are a smattering of issues when one tries to do this, so let’s cover a few here so that you can be informed enough not to repeat the mistakes others have had to deal with the hard way.

Personal Doesn’t Cover Business

On the most fundamental level, insurance for personal property is unlikely to cover business assets. While your specific policy will be the deciding factor here, most forms of coverage stipulate that the property insured — be it a plot of land, a building, or some good you intend to sell — be of a personal nature, meaning not related to a business. Even something like a home office is typically excluded from personal coverage despite being in your own home. That means that even if you were to try to have your policy pay out for damages to your business, you would be denied on these grounds. Considering at least 40% of small businesses are expected to file a claim within the next decade, it might not be a good idea to leave that to chance.


Assuming you manage to find a personal insurance policy that does cover your business in some way, it’s very likely that you’ll still end up underinsured. To be underinsured just means that, while you have insurance, your policy does not cover enough to fully cover your entire operation or does not pay out enough in the event you file a claim. Both of these are fairly likely if you try to use a personal insurance policy to cover your business operations due to the personal nature of the policy. In most cases, a personal insurance policy was designed to insure only one individual and their things, so trying to apply that to an entire business just won’t be enough.

Unique Risks

While personal and business insurance may overlap in certain areas, the fact remains that businesses face unique risks when operation that aren’t comparable to the average person’s insurance needs. For example, the risk of theft for businesses is typically much higher than for an individual’s home. Having a policy tailored to the expectations of a business is beneficial as you’re both more likely to be covered in the event something happens but also more likely to get a better payout compared to a personal policy.


Insurance costs money, but there are various ways to get a better deal. Part of that will obviously be in choosing the right insurance company, but another part is simply choosing the right coverage. While business insurance does typically cost more than personal insurance, you’ll often find you’re paying less by purchasing a business insurance policy rather than trying to expand your personal policy to cover all your business risks. This is in addition to the previously mentioned point regarding the gaps and exclusions when applying personal insurance to a business. Overall, it’s just a better value.

In Summary

In almost every instance, trying to substitute proper business insurance with a personal insurance policy will not end well. Avoid common pitfalls and mistakes related to this by purchasing the right coverage for your operation today. If you’re looking for somewhere to do that, has you covered (literally).