You cannot think of starting a business without thinking of the risks you might face, can you? A wiring problem could cause a fire that destroys all your possessions, an employee could get hurt, and a client might sue you for a breach of contract, just to mention a few things you might have to deal with. And, if you run an online store, you might be hacked and held liable by clients. So, Yes, small businesses need insurance.
At the bare minimum, you are looking at property insurance to protect all your stuff – this will ensure that you get to replace property and repair the damages out-of-pocket. You also need liability insurance because a client or employee might sue you if they get hurt in your business premises.
There are three types of liability insurance:
General liability insurance to protect your business against property damage or bodily injuries to a third party as a result of business activity.
Product liability insurance to protect your business from potential injury from manufactured products
Professional liability insurance also called the errors and omissions insurance that protects the business from harm as a result of negligence or a mistake.
Reasons for business insurance
Without liability insurance, your business could easily crumble because of the damages you will have to pay in the lawsuit. Accidents happen, and you might be in breach of your contract. Without an insurance cover, you won’t have a fall back plan or a buffer to keep your business running.
It’s a legal requirement
As long as you run a business, you’ll be required by law to provide different types of insurance ranging from the workers’ compensation insurance to unemployment and disability insurance. The location of your business and the line of business will determine the kind of insurance you are legally required to carry.
Insurance will keep your business running
In the event of a natural disaster and damage to property, filing an insurance claim will ensure that you recover lost property and repair the property soon after the calamity. All you need is a Business Owners Insurance for the protection of your business against losses resulting from a natural calamity.
It protects employees
Your employees are your most valuable assets, and you have to protect them in the best way possible. A workers’ compensation cover protects your employees and your company in the event of an accident on the business premises. Remember that protecting the interests of your employees is the best thing you can do to protect your business from liability claims and lawsuits.
Your business will look more credible with business insurance. Prospective clients and customers will trust you when they know that your business is insured because they know that if anything goes wrong, they will be compensated. The modern-day economy is build on trust and insurance makes that possible,
Other reasons why you need insurance include:
- It will attract and retain employees
- It might be a requirement for your work contracts like the ones for leasing property or keeping new clients
- Lastly, you need it because you cannot predict the future.