Managing a business involves natural risks: an employee could be injured on the job; a natural disaster could destroy the property; or a client can sue, alleging a contractual breach.
For these and other reasons, it is important to protect your property, both professional and personal. One of the best ways to do this is to make sure that you and your business are properly insured. Here are the top 10 reasons why you need business insurance.
1. It’s the law
Most countries’ law requires companies with employees to provide special types of insurance: workers’ compensation, unemployment, and disability depending on the state where the company is located.
Lack of legal coverage can result in fines, civil or criminal penalties, exclusion from public contracts, and “cease and desist” orders, which could cost you far more than the cost of a policy. insurance.
2. You could be sued
We live in a contentious society. In the event of a lawsuit or a liability claim, without insurance, your business could collapse. An accident, a broken contract. A disgruntled employee, and it’s over. Even if you win the lawsuit, you could go bankrupt because of 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: running a successful business.
There are list of disasters in every country that, if they did occur, could result in legal action. Some are humorous, but all are worth considering. Check with your country’s law.
3. Keep your business running
What happens to your business in the event of a natural disaster, such as an earthquake or a flood? P&C insurance covers loss of property – buildings, equipment, etc. – but what about the money you lose during your business shutdown?
This is where Business Owner Insurance (BOP) plays an essential role. This can help a business survive a serious disaster by protecting itself from loss of income.
The way it works is that the insurer pays you the income your business would have made while it was out of order (assuming it’s due to a covered loss). The balance of payments also offsets normal operating expenses (for example, rent and utilities) that you would otherwise have incurred during this period.
Some companies not only choose to provide lost income but also include protection to pay their employees, up to a maximum of 12.
4. Makes You Look Credible
Here’s a reason you may not have thought about: Having insurance makes your business believable. Business insurance shows your customers and potential customers that you are safe. If something is wrong with the work you do for them, you have a way to compensate.
This is the reason why home service companies carry the declaration “under license, bonded and insured” on their trucks and their signs. This creates confidence, the currency of a modern economy.