Business insurance, also called commercial insurance, is tailored for specific situations faced by both big and small companies. The primary purpose of this insurance is to help cover costs that may arise out of unexpected events. If your business endures property damage or some form of liability claims, you’ll be covered. But you may be wondering if the benefit of having it is worth the cost of the policy.
Just like other insurance, there are many options in business insurance policies such as:
- General Liability/Business Liability Insurance
Helps protect your business from liability claims alleging bodily injury, property damage, libel and slander.
- Property Insuance
Helps protect your business and its physical assets. It can pay your repair or replacement costs if your business property is damaged or destroyed from a fire, theft or other covered loss.
- Worker’s Compensation Insurance
Provides financial support to employees who are unable to work because of a job-related injury or illness
- Unemployment Insurance
Provides benefits to workers who lose their jobs through no fault of their own
Provides income in the event a worker is unable to perform their work and earn money due to a disability
Is Business Insurance Required?
Some states will require that businesses hold insurance. It is wise to be aware that if you do not have any business insurance, you will have to pay in the event of an accident. Depending on the incident, this cost can be high enough to completely destroy the financial situation of your business. Examples of such unfortunate events include fires, employees getting injured on the job, or unforeseen legal fees.
We can show you why you need to consider business insurance. Here are the top three reasons why you should consider insuring your small business:
Signing on a Commercial Lease
When you sign a lease for a commercial property, it is often a legal requirement that you have an insurance policy. Specifically, you may need one that has the commercial general liability insurance clause. This business insurance covers the insured party against the claims of personal injury or property damage, related to a third party.
Buying Expensive Equipment
When a company makes a massive investment in equipment, it only makes sense to properly protect it from theft or damage. The same goes for property investments as well, such as land or storage space. This is where ‘property insurance’ and ‘equipment insurance’ come into play. There is also ‘commercial auto insurance’ available for businesses while buying cars.
Hiring High Quality Resources
Every business wishes to hire and retain the best resources available in the industry. But talented and hardworking employees do not come easy. It is not just about salary levels either. It takes salaries, additional benefits, and a strong health insurance plan to build a qualified and motivated team of employees. A health plan can make all the difference for your company and its future growth potential when you are looking to expand your team and get the best-suited people on board. While most big companies already offer health plans as their employment packages, small businesses also have to meet these requirements if they wish to have exceptional employees as well.
It is wise as a small business owner to take inventory of your company’s financial situation and ask yourself some questions. Look into your company’s savings and evaluate whether you would be able to bear a loss if there is a major event in your office.
Even if you don’t have expensive equipment that needs insurance, consider that if an unforeseen event causes your suppliers to go late on their deliveries or your customers to go late on their payments, or you have a legal mishap. You need to consider if you will be able to keep your business afloat.
Benefits of Small Business Insurance
Having dealt with the reasons why it is risky if you do not have insurance, it will also be useful to look into the benefits you stand to gain if you do. Small businesses are easy and frequent targets of on-site accidents, because they have fewer employees, close office spaces, and less technical coverage.
It doesn’t even matter if the accident is big or small. From a twisted ankle of an employee to an engulfing fire, everything can blow up into a huge expense. With an insurance policy, you don’t have to worry about any of that.
Similarly, small businesses often do not have the best of the best security systems either. Commercial insurance also protects your financial situation in case of a theft or vandalism. Finally, with insurance against natural disasters, you can also get rid of worrying about your inventories and assets when there is a warning of an earthquake or a flood. Insurance policies will cover your damages and you will not have to spend your hard earned funds on accidents that were not even your fault, or perhaps no one’s fault at your company.
Considering the risks of having your own business, the only prudent course of action is to actually get an insurance policy best suited to the needs of your small company. You cannot predict the future. It is wise to protect yourself, your assets, and your employees through business insurance.