There are many essentials in the world of business, and insurance is one of them. Whether you are an established business owner or you’re considering starting one, you need to know why business insurance matters. There are some things you can do without running a small business, such as an accountant. If you’re capable of managing your assets on your own, that’s perfectly acceptable. Business insurance isn’t one of those things. It’s illegal to operate a business without business insurance in most states. And while that’s reason enough to secure insurance before you open your doors, we’d like to show you some other reasons that are just as equally important. So join us as we detail why you should get business insurance.
Businesses should have business insurance, as it helps cover things like liability claims and property damage. Therefore, eager entrepreneurs like yourself might have to pay for expensive damages and legal claims against your business out of your pocket. In turn, this could devastate your finances in the right scenario, leaving you and your dreams out of business.
As we stated in the open, some states require companies to purchase certain types of business insurance. And if you employ at least one person, you must have a minimum of general liability insurance. With that said, you can choose many company insurances in natural disasters, claims against the company or other employees, or legal actions. In almost all states, you should buy some form of insurance for people working in your company. What kind of insurance? The most notable is perhaps insurance for workers’ compensation. This coverage protects you from paying medical wages and other related expenses in the event of an employee getting hurt on the job. And with traditional business insurance, you are protected from theft, loss of wages to injured workers, vandalism, and damage. Without insurance, these expenses become your financial responsibility. If you don’t have the working capital to cover such expenses, it can destroy your business and force you to close down permanently. You must research and find out whether you need business insurance in your state. If you have anyone on payroll, most states legally enforce businesses to have unemployment insurance and workers’ compensation. Depending on the location of your business, you may be required to have disability insurance. Business insurance is an essential component that entrepreneurs can use to insure themselves and their assets when unforeseen circumstances arise.
Entrepreneurs can obtain a wide range of commercial insurance to customize their insurance according to their company’s specific risks. When considering coverage for your company, remember the important aspects of your business that you need to protect. Some of the most common aspects include:
Please note that your insurance needs may change as your business grows. In addition, it’s important to remember that companies in different industries require specific commercial insurance to meet their needs. Let’s look at a couple of examples to give you a better idea of the insurance plans available to businesses. Retail Retailers can benefit from increased reliance on real estate income and franchise expansion. When a third party that your business relies on causes your company to lose business, the Business Income from Dependent Properties can help make up for the business loss. For example, let’s assume that the manufacturer of the goods you sell suddenly stops working and cannot deliver your shipment. This could result in you losing business. Depending on the reason behind the manufacturer’s closing, Business Income Dependent Properties insurance can help make up for lost income. As a retail business owner, accidents on the job can put your company in serious jeopardy. Thanks to Franchise Upgrade coverage, however, it can help pay the costs needed to upgrade your retail store so that you’re up to franchise standards following a covered accident. Real Estate Real estate companies are more likely to have what’s known as commercial auto insurance. As such, an employee accidentally injured while driving on the job is covered thanks to this insurance. Real estate agents can also purchase EBL (employment benefits liability) and EPL ( employment practices liability ) for extended coverage. For example, EPL insurance covers part of the legal expenses if an employee files a lawsuit for unlawful dismissal, harassment, discrimination, or other employment issues. EBL helps pay for claims caused by errors or omissions in the management of your pension plan offered by your company.
If you have a BOP ( Business Owner’s Policy ), your business insurance can help ensure the safety of your customers. Business Owner’s Policies combine your company’s property and liability insurance to protect your company if a customer suffers an injury resulting from a slip or fall. In addition, the BOP will help you with medical expenses related to the customer’s injury. But that’s not all. Business Owner’s Policies also cover things like:
Data breach insurance is another type of coverage that serves to protect your business and customers in the event of a security breach . Since you are covered, you will receive assistance paying for expenses related to:
These types of expenses can add up quickly. Without the right coverage protecting your company from an unexpected event like a sudden data breach, it could result in your savings wiped out and your business closed for good.
Management liability insurance can help protect the owner, president, CEO, or other essential personnel who are in charge of overseeing the day-to-day operations of your business. This type of insurance is also beneficial in helping to protect people who work for non-profit organizations and public companies. The nice thing about management liability insurance is that you can just add it to your existing BOP plan.
Providing insurance for your company is more than just protecting your business. The right policy shows your customers and contractors that you take risk management very seriously. It also helps communicate to everyone that you provide adequate protection in any type of accident. As such, the public will see you as a credible organization that has its affairs in order and is prepared for the unexpected. Such foresight makes you appear as a serious contender in your industry. These kinds of things go a long way in the eyes of consumers and can play a role in your bottom line.
Last but certainly not least, protecting your employees is equally crucial to the overall health of your business. Employees like to know that they have protection in the event of an accident. Not only are people more apt to work for companies that ensure a safe working environment, but consumers also like to know that they are doing business with a company that takes care of its workers. As a small business owner, running your business is difficult enough as it is. And as we’ve mentioned, many states make it mandatory for businesses to provide insurance to their employees. So worker’s compensation does more than cover medical care. It also provides for missed wages due to an injury on the job. What’s more, worker’s compensation insurance even comes with funeral benefits. Business insurance gives your workers peace of mind that they are working for a serious company that values its employees. At the same time, it makes you look respected in the public eye, which can go a long way in improving your profits.
No question operating a business is a challenging venture. However, it’s also a very rewarding one when you are successful. But to ensure success, you have to make sure that you follow the proper procedures, including securing business insurance. Yes, it’s an added expense. But it can potentially save your business from shutting down if there’s an accident or suit against you. Thankfully, you have many options to consider in protecting your company. If you are interested in starting your own small business or need funding to get the insurance and other requirements that your company needs, we encourage you to reach out . Here at Seek Capital, we specialize in getting promising small business owners like yourself the funding needed to turn your dreams into a reality. So contact us today to see what we can do for you. Sources: Employment Practices Liability Insurance (EPLI) | Nationwide Business Owners Policy (BOP) | Progressive What Is a Data Breach and How Do I Handle One? | Lifelock.com