Do I need to get insurance for my business?
After investing so much time, money and resources to build your business, it would only be natural to want to protect it from any potential legal liability. From the space you occupy, to the people you employ, you want everything to be safe and secure. Business insurance not only provides cover costs associated with property damage, but also provides cover against risks that are unique to the business.
If you don’t have insurance for your business, you are most likely not alone. Many business owners seem to believe that insurance is just an unnecessary luxury. They’d rather convince themselves that nothing bad will ever happen to their business than commit to monthly or annual premiums. This is not a strategy we would recommend though. It would be better to play it safe and get insurance rather than having to face a financially devastating scenario. A single legal action or injured employee can lead to business owners having to pay out-of-pocket and possibly ruin a small business before it even has a chance to gain momentum.
Why do I need to get business insurance?
In most countries it is required by law to get insurance for your employees. But it may not be compulsory for insurance pertaining to the business itself or its activities. Nonetheless, as a business owner, you should plan for events such as catastrophic natural disasters or facing claims or lawsuits against the business or other employees.
In almost every state a certain amount of insurance must be held for employees operating under your business, such as workers’ compensation insurance. Covered risks under a business insurance policy include theft, injured workers’ lost wages, and more. If your business does not have a business insurance policy, the costs may come out of pocket. In some cases, this can completely ruin your business if you do not have the finances. Below are more reasons for getting insurance:
1. To protect yourself from lawsuits.
Even though you may think you have the best clients who would never sue you. For example, litigation is often used to protect or identify liability. It might be a strategical move that a client can employ to eliminate their liability. And if you are not insured, you might end up paying hefty legal fees to defend yourself.
2. If you have invested heavily in equipment, property, or inventory.
A business insurance policy can offer protection on your investment in merchandise and may also protect your business in case of theft or damage. If you get coverage on your investment in infrastructure, you make sure that your business can change or repair property speedily.
3. If you have contracts with your clients.
Even if your contracts with your clients are solid and ironclad, it does not discount the possibility of having to go to a court of law. Complications happen, and since contracts do not solve every conceivable problem, sometimes lawsuits become unavoidable. Insurance will come in handy in this situation.
4. If you have employees depending on you.
Having employees is the number one reason for getting business insurance. This is mostly for legal reasons. Consider purchasing insurance policies that protect your employees’ livelihood such as liability insurance.
5. If you want peace of mind.
Since wishful thinking is not a real plan, consider taking responsible actions such as getting coverage. If you want peace of mind and want what is essential for the longevity of your business, you’ll want to protect your business from factors that are outside of your control.
What are the types of business insurance available to businesses?
1. Property Insurance:
Property insurance comes in handy if you own your building or have business property, such as office equipment, computers, and inventory. This type of policy offers protection against fire, vandalism, and theft.
2. General Liability Insurance:
General Liability insurance provides defence and damages if your business, your products or services cause or may have caused Bodily Injury or Property Damage to a third party. It is the kind of insurance that can be helpful to any type of business.
3. Business owner’s policy:
A business owner’s policy may cover business interruption insurance, property insurance, vehicle coverage, and liability insurance. You may also speak to an agent to alter the package so it fits your company’s specific needs.
4. Worker’s Compensation:
Worker’s compensation provides pay replacement and medical assistance to those who are injured on the job. For the employee to enjoy these benefits, the employee will give up his/her right to sue his/her employer for the incident.
5. Professional Liability Insurance:
Professional Liability insurance, also known as Errors and Omissions Insurance, offers defense and damages for failure to deliver professional services as per the contract.