If you are in the planning stages of starting a business or you’ve just begun running a start-up, you already know that there are risks involved with being a business owner. Many different things could happen, like getting sued for malfunction of a product, an employee getting injured on the job, or a fire that could damage important equipment or machinery.
When you start a business, you accept these risks. That doesn’t mean that a loss should spell disaster for your business – and not if you have the right small business insurance to safeguard your business, team, and assets.
Start-up and small businesses are especially susceptible to disaster, given that they haven’t been around as long and may not have a fully fleshed-out plan for what to do if something were to go wrong. Not only that, but you might not have the finances built up yet to pay for necessary repairs or replacements.
Reason #1: You Might Not Be at a Place Yet Where You Can Recover from a Costly Loss.
Many small businesses are forced to close their doors due to losses they are unable to recover from. We underestimate the costs that arise from theft, vandalism, disaster, and lawsuits – and they sneak up without warning.
Start-ups especially are at risk of this because they have not completely established themselves yet. This is why it is so critical for small businesses or start-ups to acquire small business insurance. It helps defend your operations as they begin so that you can be guaranteed decades of business.
Reason #2: It Might Be Against The Law to Do Business Without Insurance.
Depending on the nature of the business you run, it may be against the law to operate without the right kind of insurance. For instance, professional businesses (businesses that offer professional services or advice) may need to provide proof of insurance.
The cost of being caught without legally required insurance is far more than the insurance itself, so it is always imperative you acquire the right kind of coverage before you work with clients.
Reason #3: It Adds Credibility to Your Business and Boosts Its Reputation.
Business insurance demonstrates to potential customers and clients that you’ve put effort and thought into your operations and that you are covered if anything should happen. If a client decides to do work with your business and something goes awry, you have compensation ready.
Small business insurance is a good way to show prospective clients that you’re trustworthy and can benefit your reputation in the long run.
Reason #4: Depending on the Nature of Your Business, Contracts May Require Insurance.
There are a few different situations where you may be required to carry insurance, such as if you are renting or leasing a building, doing a government contracting job, or if you require a loan before you can start a job.
General contractors, subcontractors, and even property owners looking to do their own work may be asked to show evidence of their insurance before a job can even start.
Reason #5: Insurance Can Protect Your Business’ Valuable Equipment and Assets.
What would your company do without its valuable equipment and machinery? Disasters can happen at any point, whether we prepare for them or not. Business interruption and equipment breakdown are both valuable coverages to have if your business relies on its essential pieces of equipment or machinery and couldn’t function normally without.
If you were to count up the total cost of your business’ equipment, would you be able to pay for replacements if something were to happen? Small business insurance can help.
Reason #6: Lawsuits Happen at Any Time – and They Can Be Expensive.
Bodily injury, property damage, claims of negligence, misinformation, product malfunction – the list goes on. If a third party or employee were to sue your business for any reason, whether that reason was legitimate or not, would your business be able to afford the resulting legal expenses? Commercial liability or professional liability are handy and may be able to help compensate in these circumstances.
Reason #7: Having Insurance Can Attract (and Retain) Quality Employees.
When looking for work, employees want to work for trustworthy businesses that have perks available to them like health, disability, and life. Having insurance can attract new employees and keep your current ones satisfied.
Reason #8: The Future Is Uncertain, and Insurance Can Protect Your Peace of Mind.
It’s hard enough to start a business. You sink a lot of time, money, and effort into the job. It would be terrible if something were to occur that undid all your progress, but you can never predict when these sorts of things happen. Injuries on the job, natural disasters and extreme weather events, lawsuits and the like all happen without warning.