You’ve probably heard of all kinds of insurance before. Maybe you know someone who has had to file a claim, or perhaps you have even filed a claim yourself. Understanding the basics of this type of coverage is important, but knowing why it is so important when owning your own business is essential. Insurance is one of the best ways to protect your assets if something goes wrong. In case you aren’t yet convinced, here are seven reasons why small business insurance matters and why you need to get some as soon as possible.
1. Protecting the assets you’ve built up over the years
When you start a business, you are essentially building up assets. This could be in the form of machinery or tools, inventory, cash reserves, or even brand recognition. You’ve likely built up a sizeable amount of these assets, but you must ensure you protect them. If any of your equipment is damaged due to a fire, it could cost you a significant amount to replace. If any of your inventory becomes contaminated, it could be impossible to resell.
The same goes for any cash reserves you might have. If someone successfully sues you, they can take those funds. And while some assets are harder to protect, you can still ensure you have the proper insurance in place. For example, you can protect your brand’s reputation with a valid indemnity policy. This way, if anyone ever sues you, your policy will kick in to pay their legal costs.
2. Helping you recover from large losses due to accidents or natural disasters
Like most small business owners, you’ve likely built your company up from the ground up. You’ve worked hard and invested a lot of your time into it. If a large loss occurs, such as a massive fire, hurricane, or other natural disaster, it could cost you everything, and it could take a long time to recover from it. Insurance can help you recover from these large losses. If you suffer a large loss due to an accident, you can file a claim and receive the funds necessary to help you get back on your feet.
Be careful; just because you have insurance doesn’t mean you should file a claim for every little thing. You want to ensure you’re only filing claims for necessary significant losses. This will help you maintain your company’s positive cash flow and keep your employees happy.
3. Ensuring your business is protected against employees’ dishonesty and negligence.
The number one way businesses lose money is due to employees’ dishonesty and negligence. Employees can steal money, fake time sheets, or even damage property. While you should trust your employees, it is impossible to know what is going through their heads at all times.
Insurance can help correct any losses due to employee dishonesty or negligence. Some of the most common types of insurance you’ll want to consider here are workers’ compensation, employment practices liability, and coverage for business owners. Workers’ compensation insurance will help pay out any employees injured on the job and unable to work. Employment practices liability insurance can help you cover any legal costs associated with an employee claiming wrongful termination or discrimination.
4. Ensuring employee safety during accidents
Some accidents just happen, and there isn’t anything you could have done to prevent them. What happens if one of your employees gets hurt on the job? Will their medical bills get paid? Will they be able to get back to work? You can protect your employees with the right kind of insurance. You can choose to include medical insurance coverage in your employees’ benefits, or you can choose a different insurance option. For example, you can opt for a workers’ compensation insurance policy. It will help pay out any medical bills due to workplace accidents. It will also help pay out any lost wages while your employee is recovering.
5. Providing the company’s growth and expansion protection
Your business is likely growing and expanding almost daily. You might hire new employees, acquire new supplies, or even rent additional office space. These choices can be costly, but they can also be covered by insurance. You can use your insurance policy to protect your assets as they grow. When you make a large purchase, such as renting a new office space or purchasing new equipment, you can cover those assets with insurance. You can also protect any new employees added to your payroll with insurance.
6. Offering liability coverage for your business
There are many different types of insurance you can use to protect your company from lawsuits. The most important kind of insurance to have is liability insurance. This insurance will help pay out any costs associated with lawsuits by customers. Anytime someone gets hurt using your product, walking on your property, or is otherwise injured while in contact with your business, they could sue you. If you don’t have liability insurance, you will be personally liable for paying out these claims. Depending on the severity of the injury, these claims could cost you everything you own.
7. Protecting your brand’s reputation
Corporate social responsibility is more important than ever before. People are becoming more aware of how their products impact the world around them. You can protect your brand’s reputation by purchasing an indemnity policy. If anyone ever sues your company for reasons other than personal injury, this policy will help cover the costs associated with defending your company. It will also help pay out any settlements or court fees. Corporate social responsibility is a great way to protect your company’s reputation. You can donate funds to various causes, partner with other businesses to help the environment, or even use recycled materials in your marketing materials.
When you own your own business, you have many risks that can be reduced with the help of insurance. It can help protect your assets and ensure that no matter what happens, you can recover. While you may have heard horror stories about insurance companies denying claims and making the process complicated, purchasing the right insurance for your business can protect yourself from this.