When opening your own business and during its constant growth, you are exposed to a large number of risks. An employee could be injured on the job; a natural disaster could destroy your property; or a customer could file a lawsuit, alleging a breach of contract.
These and more reasons are enough to ensure your company. Here are 6 reasons why you should choose a coverage plan according to your needs
1. By law you are required to be insured:
Businesses with employees are required by law to provide particular types of insurance: workers’ compensation, unemployment, and disability, depending on the state where your business is located.
Not having the legally required coverage could result in fines, civil or criminal penalties, exclusion from public contracts among others, which could cost you much more than the price of an insurance policy.
2. You can get sued
We live in a litigious society. Without insurance your business could fail in the event of a lawsuit or liability claim. Even if you win the lawsuit, you could close your business due to the cost of legal defense.
Rather than worrying about what might happen, liability insurance can give you peace of mind and allow you to focus on what really matters and that is running your successful business.
Findlaw has a list of calamities that could result in a lawsuit.
3. Keeps your business up and running
Business owner’s insurance (also known as BOP) can help a business survive a serious disaster by protecting it against lost revenue.
The insurer pays you the income that your business would have earned while it was out of service (assuming it is due to a loss that is part of the coverage). BOP also compensates for normal operating expenses like rent and utilities that you would have otherwise incurred during that time.
4. Gives you credibility
You may not have thought that having insurance makes your business look credible.
Commercial insurance shows your potential and current clients that you are a safe bet. If something goes wrong with the work you do for them, you have a way to make up for it.
That’s why home service companies carry the «licensed, warranted, and insured» statement on their trucks and signage. You build trust and reliability.
5. Protect your employees
Neither the products or services you offer are your most valuable assets, the equipment you took so much care to maintain, or even the brand you fought for years to build. Your most valuable asset is your employees, and it is important to protect them in the event of an accident.
You are required by law to carry workers’ compensation, although you may consider offering disability coverage. Protecting the interests of your employees is also protecting yours.
6. Contractors could require it
If you rent or lease your business premises, you may require insurance, as the owner’s policy may not cover it. If you are borrowing money to finance buildings, equipment, or operations, the loan agreement likely contains an insurance requirement.
In contracts with clients, you can specify that you have insurance in case things don’t go as planned.