Have you started a small business?
If so, you likely started out excited and ready to make money and impact the world doing the work you love. You’ve carefully considered your budget and maybe even have a few years of business success under your belt.
But do you have business insurance?
Sometimes, the owners of small companies think their business is too small to incur any serious risks. Yet, that doesn’t mean the risk isn’t there, and insurance should not be considered optional.
Want to know more? Keep reading to find out why you should purchase small business insurance for your company!
What Is Business Insurance?
Before we get into why you need business insurance, we should define what it includes and talk about the different business insurance types.
Put simply, business insurance protects you from any liabilities associated with workplace injuries or property damage. When you buy into a business owner’s policy (BOP), you get coverage from any liability claims made against your business, such as if a client or employee gets injured on your property.
You also receive protection from property damage that results from either natural disasters or other forms of loss.
In addition, you should purchase workers’ compensation and business income insurance policies. Workers’ insurance helps you retain your talent if they become injured by replacing some of their salaries. Business income insurance helps you replace income should your business not be able to operate due to a loss.
Why Do You Need Business Insurance?
When you form a small business, you might worry about purchasing insurance. After all, it often becomes financially difficult to get a business off the ground, even if it later turns out to be a profitable venture.
Many business owners try to reduce their expenses so they can focus on running their company effectively. As such, some may try to get around having business insurance, but this isn’t wise.
Why? Let’s go into it in the sections below.
You May Need Insurance to Stay Legally Compliant
If you run your business in the United States, you may have to possess some forms of insurance in order to remain compliant with the law.
The required forms of insurance vary from state to state, so you should check the requirements for your location. In most locations, though, workers’ compensation and disability insurance are required.
Disability insurance helps employees replace their income if they have become injured or disabled on or off the job and cannot continue working (workers’ compensation only covers on-the-job injuries).
In particular, though, business insurance helps you remain protected against damages to your business or property. You should invest in purchasing various insurance to shield your company against undue hardship and maintain your legal status.
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Business Insurance Protects You Against Claims
When you have a small business, you may wonder whether or not you genuinely stand any risk of incurring harm. Especially if you don’t have any employees, you may think there’s nothing you need to protect against.
Yet, if you don’t purchase business insurance, you might end up embroiled in lawsuits that could ruin your small business, or you could suffer damages from which you won’t recover.
Think of it this way: even if you don’t have employees, you might have people come to your office. As soon as they enter your property, any injuries they receive might become grounds for a personal injury lawsuit against you. United States law determines that business owners are responsible for keeping their areas safe.
Because of this, any employees or clients who become injured on your property can file a lawsuit against you.
Having business insurance protects you in case you become targeted in a lawsuit. In the case of a lawsuit, insurance companies negotiate with the other party’s lawyer and help you pay any settlements. That way, you don’t have to pay all of that money on your own.
Business Insurance Protects You from Property Damage
Have you thought of what might happen if your place of work suffers damage to its property?
No one anticipates property damage, but it often comes in the form of accidents or natural disasters. If your building ends up needing repair, you might not have the resources you need to spend on your office renovations. Yet, if you have business insurance, your insurance company helps you pay for the expenses.
Protect Yourself from Income Loss
When businesses suffer damages, they sometimes can’t continue their operations. This is especially true for businesses that have difficulty continuing their business online. This often results in them losing income.
In some situations, though, company owners have been able to remain afloat with business income insurance. This type of insurance helps replace income in different situations, allowing you to continue running your company as you recover from whatever loss you suffered.
Since any business can suffer from unexpected losses, you should consider purchasing business income insurance to keep yourself protected when hardship hits.
However, most business income insurance policies require the loss you suffered to fit into a few categories in order to qualify for coverage. Before purchasing insurance, you should review which types of accidents you believe you are most at-risk for and make sure your insurance covers them.
Ready to Get Business Insurance?
So, are you ready to get business insurance for your small company?
Small business owners may be hesitant to spend money on insurance. Yet, if you don’t get the insurance, you run the risk of losing money to lawsuits or unexpected disasters and losses. As such, every small business owner should purchase business insurance.
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