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5 Ways Insurance Can Help Your Small Business

When you own a small business, you are precariously prancing through a minefield of potential disasters that could instantly run your business into the ground. It is vital that you learn how to avoid them at every turn. One of the best ways to avoid many types of disasters is by purchasing insurance. Insurance comes in more forms than most people will ever have a need for, so it is up to you to decide which to invest in. Here are five ways that insurance can help your small business flourish by protecting various aspects of your company.


1. Liability Protection

An injury lawsuit at the wrong time can decimate your business and your personal expenses in a matter of months. Although there is no way to eliminate legal liability, commercial general liability (CGL) insurance is a great way to start purchasing the coverage you need. This type of insurance provides a baseline of protection for many kinds of bodily injuries, personal injuries, property damage, and many other unfortunate scenarios that sometimes crop up. CGL insurance quotes are easy to come by for most reputable businesses that take the necessary precautions to run safely and legally. Liabilities unavoidably appear in every business no matter how much you try to correct for your errors. In general, as long as you follow all the laws and guidelines set by local, state, and federal governments and any other organizations that have power over you, you should be fine as long as you have liability insurance. Liability insurance covers legal fees and any damages you may have to pay. It should be noted that liability insurance does not cover intentionally harmful or criminal acts, but since most companies are not engaging in that type of activity, it is rarely something to worry about.


2. Property Protection

The first point was primarily about protecting your business from damages it might unintentionally inflict upon others, but it is also important to have insurance that protects your business from physical and monetary damage. Property insurance covers a wide range of damages that your business might incur. The best property insurance covers the whole cost of your building and everything inside of it. However, that does not mean that you should rely on it to replace everything that needs to be updated. You still need to be a responsible company owner which means not exploiting the systems protecting you. Property insurance is another branch of insurance that can be incredibly broad. Homeowners insurance or renters insurance can be helpful for almost everyone who happens to own or rent a home. Things like flood insurance and earthquake insurance also fall under the property insurance umbrella. Chances are if you live somewhere that commonly experiences a certain type of natural disaster, there are several insurance companies in your area that would love to gain you as a new customer. While these are great for protecting you from the elements, certain types of property insurance protect you from human-caused destruction as well.


3. Employment Protection

It is rare that an employer intentionally seeks to discriminate against certain demographics of people in his or her hiring process, but it does happen. However, even if you do not intend to discriminate, you are not necessarily safe from lawsuits from people who perceive your hiring practices as discriminatory. Employment practices liability insurance is there to protect you against claims of discrimination including wrongful termination and sexual harassment lawsuits. You are at a risk for these types of lawsuits for as long as you have employees, so try to reduce your risk as much as possible. There are several steps you can take to reduce your risk depending on what kind of business you run. The first and most obvious is to try your best to not discriminate in your hiring process. Everyone has unconscious biases, but everyone can also try to overcome those biases. Consider conducting blind interviews where you do not see the future employee or even hear his or her name until after you have made the final decision. For sexual harassment cases, always make sure that everyone knows how and where to report incidents so there can be no mistake that you provide proper resources.


4. Income Protection

Sometimes an unforeseen disaster strikes, such as a global health crisis, and it becomes difficult to make money at the same rate as before. In this instance, it is helpful to have business income insurance. These disasters can come in any form, but they are usually small-scale disasters that affect businesses on an individual level such as fires or severe illnesses for businesses with very few employees. This protects small businesses from circumstances outside of their control that could destroy them financially which would be unfair and bad for the economy. In 2020, many businesses had to take advantage of their business income coverage due to the aforementioned global health crisis. The main selling point of business income coverage is that it provides a safety net if your business has to run at reduced capacity. However, there is a limit to how far you can push this coverage. Your insurance company will not cover your lost revenue forever, and most of the time, the limit is about a month. You cannot leave your employees without a paycheck because of a slowed revenue source which is one more reason to invest in this coverage.


5. Automobile Protection

Even if your business is not particularly reliant on automobiles, you still might have a reason to invest in commercial automobile insurance. For any company that has even a single company-owned vehicle that employees drive, this coverage is necessary. Most of the time, it applies to any type of vehicle whether you have vans, cars, trucks, or anything else, but there are also insurance plans specific to more industrial vehicles if that interests you. Company cars are most commonly used to make deliveries or otherwise move goods around, but your automobiles can be used for any purpose. It is important to address who is at fault in a car crash because that determines who will be held financially responsible. Car insurance of any kind is so important because if you are the one at fault, you do not want to have to pay the full price. Commercial automobile insurance is especially important because of the very real possibility that one of your employees accidentally crashes into a vehicle that belongs to one of your customers. Accidents happen, and a single accident should not be held against an employee for too long. After all, if you have good enough insurance, then you have nothing to worry about.


People insure more things than you could ever imagine. Many celebrities insure their most iconic physical attributes in case they ever have a tragic accident. As a small business owner, you have to do something similar. You have to think about what the most important aspects of your company are and decide which ones would be smart to insure. You can insure almost anything you want, as evidenced by the celebrity example, so never think that anything is too insignificant or stupid to insure because you can guarantee that someone has insured something weirder.

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