It’s crucial to have the proper small company insurance. You can use it to protect yourself from a decline in sales, natural calamities, and even unanticipated emergencies.
Running a business has risks such as an employee getting hurt at work, a natural disaster destroying property, or a client suing you for a breach of contract.
Protecting your assets, both business and personal is crucial for these and other reasons. Ensuring that you and your company have appropriate insurance is one of the greatest methods to achieve this.
Here are a few main justifications for why your company requires insurance.
It’s the law
Depending on the state where the firm is located, the law mandates that companies with employees furnish specific forms of insurance, including workers’ compensation, unemployment, and disability.
If you don’t have the coverage that is legally needed, you risk paying far more than the cost of an insurance policy in fines, civil or criminal penalties, exclusion from government contracts, and “stop and desist” orders.
You could get sued
Our society is litigious. Your company can go out of business if you don’t have insurance in the case of a lawsuit or liability claim. One mishap. One contract breach. It only takes one unhappy employee to end things. Even if you win the lawsuit, the cost of your legal defense may force you out of business.
Liability insurance can provide you with peace of mind so that you can focus on what matters—running a successful business—instead of worrying about what might happen.
Keeps your business up and running
What transpires to your company if a natural disaster like an earthquake or flood occurs? P&C insurance protects against the loss of property, such as buildings and equipment, but what about the money you lose while your firm is shut down?
BOP, often known as business owners’ insurance, is essential in this situation. By guarding against income loss, it might assist a company in surviving a significant catastrophe.
The insurance pays you the revenue your business would have generated while it was not operating (providing the loss was insured). BOP also covers costs that you would have otherwise had to pay during that time, such as rent and utilities.
Some businesses opt to cover employee payments for up to a year in addition to lost income insurance.
Makes you look credible
Here’s one you might not have considered: Having insurance gives your company a professional appearance.
Business insurance demonstrates to potential consumers and clients that you are a reliable choice. You have a mechanism to get paid if something goes wrong with the task you accomplish for them.
Because of this, home services businesses advertise that they are “licensed, bonded, and insured” on their vehicles and their signs. It increases trust, which is the basis of the modern economy.
Protects your employees
Your most precious asset is not the goods or services you provide, the machinery you take great care to maintain, or even the reputation you worked so hard to establish over the years. Your employees are your most precious asset, thus it makes sense to safeguard them in the event of an accident.
Although it is required by law that you carry workers’ compensation insurance, you should think about providing disability insurance as well, even if you have to charge your employees a portion of the premium.
By the way, safeguarding the rights of your workers is an excellent approach to safeguarding your own, particularly in the event of legal action or responsibility claims.
Covers ‘Acts of God’
An “Act of God” is any accident or event that was not brought on by human action. Lightning-sparked fires, tornadoes, hurricanes, and floods all qualify. Property and casualty insurance comes in two flavors: peril-specific and all-risk.
All-risk insurance covers all occurrences bar those specifically excluded. Particular hazards are listed in peril-specific plans, which also include coverage for acts of God like fire and flooding.