Why Insuring Your Small Business Is So Important
As a small business owner, you probably think that you do not need insurance, but the truth is that you do. Just like an established business, yours could experience lawsuits, natural disasters, or one of your employees could be injured. Because of such, you need to protect your assets, both personal and business. The cost of liability insurance for a small business is a small price to pay if you want to protect your business from the risks involved.
Here are some top reasons why you need to cover your small enterprise.
It is a Law Requirement
This particularly applies if you have employees. The law requires you to provide several kinds of insurance, including disability and workers’ compensation, based on where your business operates.
Failure to do this could result in criminal penalties, fines, and the like. You don’t want to end up sourcing the services of a criminal law attorney, do you?
To Keep your Enterprise Running
Have you ever stopped to think about what would happen to your business in case of natural disasters such as floods or earthquakes? You are likely to close your business for the duration of such occurrences, but then you lose a lot.
By covering your business, you get to survive such calamities, as your business will be protected against loss of income. When you think about it this way, the cost of liability insurance for a small business doesn’t sound so bad.
Increases your Credibility
Having your business covered makes it look credible to customers, employees, and investors. It means that you can compensate should anything go wrong.
That then tells you that the cost of liability insurance for a small business is mandatory for any business owner that wants to see their enterprise at the top.
Safeguards Your Employees
You probably think that your business brand, your business assets, or the services and products you offer are the most valuable things as far as your business.
Here is the thing: your employees are the most valuable asset to your enterprise because your business is likely to fail without them.
An insurance cover for a small business covers your interests as well as those of your employees against liability claims and lawsuits.
It Covers Acts of God
Acts of God can be described as events and accidents that are not man-made. Things like fires caused by lightning, hurricanes, floods, and earthquakes cannot be prevented.
By choosing to cover the cost of liability insurance for a small business, you protect your enterprise against such.
This means that you will, for instance, not be paying for roof damage repair caused by acts of God.
Protects Human Resources
Your business is a separate entity from you, but you cannot deny that you have to keep it running as the owner.
Now, as a human being, you can suffer an accident or even get sick. What happens then? Will your business stop running? It should not.
By paying the cost of liability insurance for a small business, you get to cover the loss of income caused by the death or disability of a valuable employee.
Plays a Part in Attracting and Retaining Staff
Getting insurance cover is not just about safeguarding your business from risks. It can also be a way of attracting and retaining valuable employees.
Aside from the salary, job seekers are attracted to the benefits that come with a job, including insurance coverage. If your business does not offer the same, the chances are that those qualified employees you need to take it higher would rather go to a company.
It is Necessary for Contracts
As far as insurance and contracts, here is what you are looking at.
You need insurance if you use your commercial land for lease or rent because you can never tell whether the property owner covers it.
If you need to borrow money to grow your business, the loan agreement will require you to have insurance cover.
Some client contracts may require you to have insurance coverage if things don’t go according to plan.
As a Precautionary Measure
Unless you can predict the future, you need to seriously consider incurring the cost of liability insurance for a small business.
This is because you can never forecast what will happen in the future. It would be great to avoid lawsuits and need a criminal lawyer, but since that is not a guarantee, having insurance coverage would be a wise move.
Peace of Mind
Sure, your business is a separate entity, but if things go south and the business begins facing challenges, you as the business owner will be stressed out and not able to run it as expected.
At this point, you already know that your business is faced with several potential risks. Having insurance cover guarantees you the peace of mind you need to focus on growing your business rather than worrying about clients or investors that want to sue you or damages caused by natural disasters.
Types of Business Insurance
Now that you know why you need to cater for the cost of liability insurance for a small business liability insurance, it is time for you to find out about the types of business insurance covers you can get for your enterprise.
This type of insurance will safeguard your business if someone claims slander, property damage, or bodily injury caused by your company. General liability insurance covers settlement and lawyer fees.
With that said, some business owners may view it unlikely that someone would visit their facility and injure themselves while there hence not purchase this kind of cover. This may work, but if yours is a busy business that welcomes customers daily, you would want to cover the cost of liability insurance for a small business.
If you have employed staff in your business establishment, the chances are that they will suffer illnesses or injuries while on the job.
With workers’ compensation cover, your employees can cover their healthcare costs and replace their wages without making your business suffer.
Professional Liability Insurance
This is also referred to as errors and omissions cover. It helps when it comes to paying for legal fees associated with mistakes made by a business.
If you provide services, this cover will come in handy as you are likely to face claims of inadequate, incomplete, and late work that can result in expensive lawsuits.
Commercial Property Insurance
You will want this insurance cover if yours is a brick-and-mortar store. Why? Because it will cover costs associated with things like blown in insulation, natural disasters, and even theft. Nevertheless, you want to note that commercial property insurance does not cover damage caused by earthquakes or flooding. You would require a separate cover for that.
Business Income Insurance
It is necessary to pay the cost of liability insurance for a small business because it will help cover loss income caused by property damage.
Business income insurance can therefore cover the cost of your commercial electrician and things like that.
Employment Practices Liability
With the employment practices liability insurance cover, you protect your business against complaints and lawsuits your employees may have. These include discrimination claims, wrongful termination, and sexual harassment.
No business owner wants to find themselves on the wrong side of the law, issue bail bonds, and put their assets on the line.
How to Get Business Insurance
Before you get to the point of paying the cost of liability insurance for a small business, you need to know how to get the cover.
You can get reviews online, but it would be better to find out from other business owners in your industry about what insurance companies offer excellent services and get recommendations.
Better still, you can enlist the services of an insurance broker because they are in a better position to take you through what your business needs in an insurance cover.
Tips for Picking a Business Cover
How about some tips for choosing a business cover? After all, you need to know what you are paying for when you get insurance for your small business. There are many covers in the market, and picking the right one will keep your business afloat.
Establish your Needs
Since there are many kinds of business covers, it is essential to consider your needs before settling on one. If you want an all-inclusive cover, you will be better off with a general liability cover.
Never assume that the policy you pick will cover the assets of your business. Knowledge is power so ask your insurance cover provider pertinent questions before making a choice.
Factor in your Risks
With an assortment of business covers and insurance providers, you need to know what the cost of liability insurance for a small business will cover. That means knowing your risks. For instance, if yours is a residential roofing service or perhaps even a plumbing repair business, you need to cover your employees against falls. If it is an online business, then you need to safeguard your data.
You know the enormity of your business’s risks, so you are in the best position to decide the kind of cover it needs. You can get a professional assessment and advice if you do not trust yourself to make the right choice.
The cost of insurance liability for a small business is just like purchasing any other product. Of course, that calls for you to weigh options before parting with your money.
As such, you want to compare quotes from several insurance providers to ensure that you get a good deal. Imagine paying for a cover only to realize later that you could have gotten the same at a lower price. Tragic, to say the least.
Get a Good Agent
Perhaps you have not thought about this, but the insurance broker or agent you use will be tasked with the responsibility of helping you safeguard your company.
Just as you would weigh your options with the covers in the market, you should do the same with your agent. Now, this can be quite tricky given that you cannot tell whether an agent is good at their job just by looking at them.
To that effect, you want to look for reviews or ask other business owners in your industry for recommendations.
The last thing you want is for your business to suffer or fail because of product liability simply because you did not get the right insurance cover.
Review your Policy Often
As you grow in your business, you will realize that your insurance cover requires regular renewal. To that effect, you want to go over your cover’s fine print and assess your business to determine whether it aligns with the cover.
The provider may have also altered their terms of service, and you want to consider such things before signing on for another coverage period. It is common for insurance policies to change, so you may want to review your business often, preferably with your agent. Should your business go through a transition or change in the middle of a cover period, consult your agent right away and have them walk you through the options available. Based on the change, you may even get to save some coins on your cover.
Ensuring your business provides security in the event that your firm causes injury to clients or employees or if your organization is affected by an incident such as a flood. It’s crucial to get business insurance not only to cover yourself but also to safeguard others. For example, if you own a restaurant and a customer falls ill after eating one of your dishes, or if you own courier service and one of your trucks hits a person, you must be able to compensate the victim.