Only around 40% of startups will actually earn a profit, and not having insurance coverage can quickly become why there is more cash flowing out rather than in. Startup owners will forgo insurance, hoping that nothing happens to anyone or anything that belongs to the company. When an accident occurs, they’re suddenly paying out of pocket, creating a negative cash flow that leads to a bankrupt company in three years.
But how does insurance help a startup, and why does yours need it?
Here is why your startup needs insurance coverage.
Protects You and the Consumers
The main reason for insurance is to protect you, the consumers, and your startup investors. Often, investors or financial institutions will require you to have insurance for the sole purpose of getting their money back if a company fails.
You also ensure there is a way to cover your customers if a high-level threat attacks your company. This could mean a data breach that results in lost money or simply covering someone if they slip and fall in the store.
Shows You’re Passionate About Your Product
By having an insurance plan for your small business, you’re showing you’re passionate about your service or product. You know that insurance costs money every month, but you’re willing to pay it to protect everyone involved.
While you may see it as unnecessary, you can use this to your advantage to keep confidence high for yourself and those invested in the company.
Can Save the Business and You Money
The most important reason to get small business insurance for your startup is to save you money. In certain cases, it might be the only reason that your company survives.
If you have a leak in the store and someone slips and falls because you didn’t have proper signage, it could be disastrous for the startup. It could mean that because you didn’t have insurance, you’re now closing the store to pay for both lawyer fees and compensation to the person involved.
With insurance, you’re protecting both the company and its money. You’ve already paid into a service that ensures that they cover someone’s medical bills or additional compensation.
Not only that, but if the leak were from a sudden burst pipe, the insurance would cover the repair to your store. So you’re saving money on both the fees you need to pay to the repair service, as well as the person that was caught up in the middle of it.
Discover more reasons to get insurance by clicking the link.
Get Insurance Coverage for Your Startup Today
Your startup will not thrive without insurance. It can quickly spell out demise if an accident befalls you, a customer, an employee, or even the business itself. So get into contact today with an insurance company to start protecting your startup.
If you want to learn more about protecting your business, be sure to check out the rest of the blog. If you know a startup owner, send this article to them to make sure they’re protected.
