Starting and growing a business is an exciting venture. There are rewards to be gained and on the flip side, there are risks that may be faced.
You have invested a lot into the business and put in a lot of time, effort and funds into it. Now, why would you need insurance? Insurance will help you secure your business from any losses or damage and to ensure it remains financially stable.
The only thing that is certain is uncertainty and you are unable to tell at this point what may face your business at a later time. Therefore, it is best that you have insurance protection. Having business insurance is very important.
A business includes many cash outflows, especially when you are starting up or scaling up. For this reason, you may consider getting insurance as an extra expense you can do away with and pose the question: ‘Do I need insurance?’
It does not matter the size of your company. You need to know the basics of big and small business insurance.
1. Safeguard Your Employees
The most important people in your business are your employees, also known as human assets. They are the ones who share the dream and vision of your business and help you to grow the company. Although it is not usually anticipated, death or accidents may occur and it is best that you get a disability and life insurance cover for your employees.
In case they become living with disabilities or pass on, they or their family will be compensated for the lost income. In the recruitment process, a deciding factor for an employee to take up your job offer is whether you provide any insurance cover for them. There are also key employees who are important to your business and you need to find out why getting insurance for them is a priority.
2. Protect Business Property
The major assets in your company such as business premises, equipment, and machinery may face damage in case natural disasters, theft or loss happen. Such events may not be avoided when they take place but you can take measures to ensure that the financial ruin will not be extensive and that you may resume operations within the shortest period of time.
A suitable policy to take in this instance is the property and casualty insurance.
3. Secure Yourself from Liability Claims
A company is a separate entity from the owner. Therefore, in cases whereby someone gets injured in your business premises or if they get improper advice from your company, they may file lawsuits. If you have liability insurance, the policy shall provide for the funds towards legal processes and you will not have to cater to these expenses.
4. To Secure a Business Loan
Your business may be growing and you want to source for additional funds to cater for the expansion. In most instances, having a business insurance policy increases your chances of getting the business loan approved and you may get somewhat lower interest rates. The lenders will know that you have protection for your business and the financial risks are managed.
5. It’s a Legal Requirement
In the majority of the states, it is a legal requirement for you to compensate your employees in the event that they become disabled, suffer an injury while in the workplace or die. Getting a policy against such incidences will enable your company to cover against such loss of income generation for the employees.
The coverage you need will depend on the type, size, and location of your business. For further clarification on this, you may consult with a local expert on the compensation insurance rules. The Small Business Authority has a guide on how you can get business insurance.
6. Insurance Is Necessary for Your Business Operations
The insurance needs of various businesses which operate in different industries vary. However, the insurance covers are necessary to keep the business from being liable to claims that may be made against them.
Companies such as banks and telecommunication companies hold a lot of customer data. Although they may be keen to ensure data privacy, a data security breach may occur and costs will be associated with this. Data breach insurance will be helpful in such instances.
Hotel and restaurant businesses in the food industry can also add a Liquor Liability and Temperature Change insurance policy. This will cover the losses brought about by spoilage if the drinks spoil after the refrigerator breaks down and losses and damage to property when an intoxicated customer fights in the business premises.
7. Business Insurance Builds Credibility
All that employees, financiers and customers of a company need to know is that your business is well managed. A business insurance policy caters for various types of risks that may occur help you to manage the uncertainties of running a business. Your stakeholders will have a sense of security and certainty that should anything occur, they shall be covered.
You should also note that the business needs may change and your company will grow; thus, you may check if the type of business insurance policy serves you well at that time and add any other policy if need be.
You Need Insurance to Secure Your Business from Uncertainties
Running a business comes with a lot of uncertainty. Therefore, you need insurance to keep the uncertainties in check.
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