Do you run a small business or are planning on starting one? Have you considered business insurance for your startup?
Don’t be the majority of small business owners who don’t consider the benefits of insurance for their businesses.
This gets overlooked by many small business owners, and it’s often to the company’s detriment.
An insurance policy helps protect the company in a serious emergency. These can range from lawsuits to natural disasters.
It’s a small business that’s most vulnerable to closing. One of the best ways to prevent this is to protect your business from the get-go.
Here’s what to know about company insurance:
- Protection from Lawsuits
No matter how profitable your business is or isn’t, you can expect to get hit with a lawsuit at some point. Most small business owners won’t have the funds to cover the costs of a lawsuit.
This is where you can depend on business insurance. It can cover a part or the whole cost of your legal fees.
If you lose a case, your business insurance might even pay part or whole of your settlement fees.
Business insurance for covering a lawsuit can mean the difference between prolonging or ending a business.
Without business insurance, many small businesses can expect to go bust after a lawsuit. With it, the business can recover and continue its operations.
- Works for Special Needs
Business insurance providers understand that each type of business has special needs. Once you start researching business insurance, the next step is to find if the insurance covers your industry.
For example, do you run a coffee shop? What about a law firm? You want to make sure your insurance policy covers the particular needs of your business.
When you consult with the insurance provider, you can ask them about their experience with your type of business.
Always ask the insurance company for case studies on how they helped similar businesses during times of distress.
- Protecting Your Company’s Property
Does your business own different types of property? What happens if this property gets damaged or destroyed? Once again, if this happens it can be a matter of life or death for your business.
Business insurance can help compensate you for your property. Property can include physical properties, equipment, and inventory.
Your first step has to be to keep a record of all your company’s property. Make sure you also write down the value of each item.
This information will help your insurance provider give you the insurance policy needed for your property.
- Natural Disasters and Force Majeure
What happens if your business falls victim to a natural disaster? What about a force majeure?
If your shop gets damaged or destroyed due to a hurricane, do you have the insurance to recover your losses?
If there’s a situation that’s beyond control, this is an example of a force majeure.
The lockdowns of 2020 might be an example of a force majeure for your business. If your government requires you to shut down your business for several months, do you have the finances to cover costs?
This is one of the major aspects that most small business owners overlook. It’s because of the lack of planning for “the worst-case scenario” that many small business owners avoid buying business insurance.
Make sure you speak to your insurance provider on how they handle such situations.
Ask them to show you case studies. These should show how they helped businesses get through natural disasters and force majeure scenarios.
- Key Person Business Insurance
There’s one aspect of business insurance catered to key personnel. These are the team members who are invaluable to your company.
This can be the person who knows the trade secrets of your business. Or this could be the CEO or CFO. These can be the supervisors who oversee large teams within your organization.
What happens if one of these key persons becomes ill? Take a moment to think about the strain that it would put on your business. You want to make sure you’ve got insurance to cover these emergencies.
The business insurance will protect your business while the key person recuperates.
If you have to replace the key person, the business insurance has your company covered. This gives you ample time to hire a replacement.
- What About the Assets?
Most small businesses have few assets to brag about. As a result, small business owners neglect to get these assets insured.
But even if you’re willing to lose your assets, this can hurt your company’s credit score.
You want to make sure your company’s assets are always protected. Even if there are only a few assets. This is where business insurance steps in.
It makes sure you don’t have to give up your assets in potential lawsuits. Or you can get compensation if you lose your assets.
- You Need a Loan
At some point, most small business owners will need a loan to scale their business. While many banks don’t require you to have business insurance, it makes a better impression on them.
Business insurance shows that you care about protecting your company. It gives the impression that you are a responsible business owner. This gives the lender more reasons to give you a loan.
Think about if you had to loan money to someone. Would you give a loan to someone who doesn’t keep their house in order? You want to give out a loan to someone who knows how to be responsible and manage their lives.
Your Peace of Mind
Looking through these 7 benefits of insurance, you’ll see that the overall need for business insurance is for peace of mind. Business insurance is like any other type of insurance in your life.
You get insurance to have protection if things go awry. You’ve worked hard to build your business; you want to make sure it lasts and is always protected.
Please share this guide with other small business owners. Make sure to encourage your fellow entrepreneurs on the importance of business insurance. You’ll also find more great business tips on our website.