Since it’s impossible to tell what the future has in store for us, all we can do is minimize the risk of negative consequences by acting responsibly and making sure that, in case something goes wrong, we suffer as little as possible. The same is true for both our private and professional lives, which is exactly why insurance should be seen as a form of risk management, rather than an expenditure.
If you are running a business, you know how risky it is. One day everything is coming up roses, while the next one can bring a disaster so powerful, that you might find yourself in a position where all hope is lost. In order to prevent that from happening, you should seriously (re)consider the insurance options for your business. Here are just the most important reasons why that is necessary.
1 You are obliged by the law
Almost every country requires businesses with employees to provide some kind of insurance, such as workers’ compensation and unemployment and disability insurance. If you don’t comply with the law, you’ll be fined and you may face civil or criminal penalties, exclusion from public contracts and “cease and desist” orders, which could all cost you much more than the price of a good insurance policy.
2 You may be sued
It’s no secret our society is quite litigious and in the event of a lawsuit or liability claim, without insurance, your business could fold. All it takes is one accident, one broken contract or one disgruntled employee. Even if you win the case, you may still realise that the cost of legal defence was so high that you have to go out of business. Instead of worrying about what could happen, you should opt for liability insurance that will both give you peace of mind and enable you to concentrate on running a successful business.
3 Insurance keeps your business up and running
Depending on where you live and work, you might be exposed to natural disasters, such as floods and earthquakes. Needless to say, they could cause great damage to your property, i.e. buildings and equipment. Also, you need to think about all the money you’d lose during the time your business is closed. That’s why you should look for an insurance company offering custom business insurance protection plans, which include loss of property and business owners insurance, helping you to survive a serious disaster by providing protection against loss of income.
4 You look much more credible
Every business with insurance looks and is much more credible. It shows your potential clients and customers that you take your business seriously, that you’re here to stay and that if anything goes wrong with the work you do for them, they will be compensated. No wonder you can see so many “licensed, bonded and insured” statements on trucks and signage belonging to home service companies. That’s their way of building trust, which is one of the most valuable currencies of a modern-day economy.
5 It provides protection to employees
Every smart business owner knows that their most valuable asset are not the products or services they offer or the state-of-the-art equipment they may have, but the employees. It makes perfect sense to protect your most prized assets appropriately as much as you can. While the law requires you to carry workers’ comp, you might also offer disability coverage, even if you charge your employees for a portion of the cost. This will not only protect your existing employees, but also attract new, promising candidates, who will look beyond the salary package when considering their job opportunities. Finally, by protecting your employees’ interests, you are also protecting yours – against lawsuits or liability claims.
6 Dealing with Acts of God
An “Act of God” is an accident or event that is not caused by human hands, such as floods, tornados, hurricanes and fires cause by lighting. There are two types of property and casualty insurance that can protect your business from an act of God: all-risk and peril-specific insurance. The former policies cover events except for those expressly mentioned, while the latter policies list specific risks and cover fire, floods and other specified acts of God.
7 Contract may require insurance
Some contracts may require you to have a particular type of insurance. For example, if you rent of lease your business facility, you may need to carry insurance, as the landlord’s policy may not cover it. Similarly, if you borrow money to finance buildings, operations or equipment, the loan agreement will probably contain an insurance requirement. Finally, client contracts may stipulate that your carry insurance in case things don’t do as planned.
These are just seven of the most important reasons why your business needs to be insured properly. Naturally, there are many more valid reasons, but these should be enough to make you think (again) about insuring your business. All those who wish to protect their assets and minimise possible damage in the future should most certainly find the best option for their business. After all, the whole point of running a business is to manage risks and make the best possible decisions for the future of the company and all the stakeholders.