We all know how important it is for us to have our own health insurance. Many even insure their assets to truly protect themselves (and their asset) from damage, and should damage ever occur, and they’re rightfully compensated. The same goes for business. Simply put: businesses need insurance.
Regardless of what your business is, insurance is important. It’s one of the few things that protect you and your business from the unpredictable flow of time- we never know what will happen tomorrow, so it’s best to be prepared now. Here are a couple more reasons why business insurance is important.
It’s a Legal Requirement
The American Small Business Association states that the law mandates businesses with employees to provide workers’ compensation, unemployment, and disability insurance, and it varies from state to state. If your business fails to get coverage that is legally required, it could get you fined, penalized, excluded from public contracts, among others. This can affect your earnings and stand as a business, which could cost you more than what an insurance policy would cost.
If you have a business selling firearms, it is very important to have a gun store insurance that covers any kind of firearm-related injury. You might also need to check if your clients need gun insurance if they will use it on their property.
Protects Your Business from Income Loss
Business Owners Insurance (BOP) helps businesses in case of major calamities by serving as protection from income loss. As long as it’s covered, the insurer can pay you the sum that your business would have made while inactive. BOP also covers operating costs like electricity and rent during that time. And like many others, you can also opt to insure not only lost income but also employee salary for up to one year.
Protects from Natural Calamities
Natural calamities, also known as “Acts of God,” are accidents or incidents outside of human actions. These are floods, tornadoes, lightning-caused fires, and the like. In these cases, there are two kinds of property and casualty insurance you can get: all-risk and peril-specific. Some specific policies cover specific risks such as floods, fires, earthquakes, and other “Acts of God.”
Insurance Protects Your Clients as Well
Your business insurance can also help cover your customers if you have a Business Owner’s Policy (BOP). These BOP policies combine business property and business liability coverage into one to help protect your business from:
- Personal and Advertising Injury, which can be used in moments when your copyright or intellectual property has been infringed
- Property damage or destruction to company property. Guns
- Bodily injury, which occurs when an accident happens within your company premises, and it injures someone
And with the ever-growing reliance on the digitalization of information, businesses also need to be protected from malicious cyberattacks. It’s become a legal requirement as well since the financial reparation and legal fees when a data breach happens can be significant.
It Protects Employees and Retains Staff
When looking for a job, employees look for more than simply a paycheck. They are also on the lookout for good benefits and perks, such as life and health insurance. Businesses that do not have insurance frequently have a difficult time attracting and retaining high-performing staff due to the perceived dangers. It also gives your employees peace of mind knowing that the business is prepared for emergencies and unpredicted situations.
Keep Your Business Afloat Even if You’re Being Sued
If you are being sued or have a case pending against you, you might go out of business soon if you do not carry liability insurance. Even if you win the lawsuit, legal expenses might be too expensive. This is one of the most important points of having insurance: you can protect your business from the money-draining effects of a lawsuit. It doesn’t matter whether you are being sued by a former employee or as a result of a botched contract; getting will cost you a lot of money from legal fees, lawyer fees, reparation, and much more- and it will all come from your company. A pending lawsuit without liability insurance might spell the end of your entrepreneurial efforts.
Nobody Can See the Future
No entrepreneur possesses psychic foresight that can predict what will occur in the future. It would be great if natural disasters, occupational injuries, or lawsuits do not happen, but no one can guarantee that they won’t. It is better to obtain insurance solely for this purpose. With the appropriate business insurance, small business owners can feel safe and concentrate on running a productive, profitable, and personally satisfying firm for years to come.
If your business still isn’t insured, make it your next short-term goal. It will be worth all the effort, and you’ll feel like it’s worth the investment.