Insurance can be sometimes daunting and tricky. It isn’t like buying food shopping or buying clothes. When you purchase insurance, you are buying into a promise. A promise that if something happens to your business that could be catastrophic, your insurers are going to assist you and your business every step of the way. Owning and managing your own business comes with risks and anything could happen, so it is important to always be protected. Your personal and business assets must be protected. You are responsible for the well-being of your employees and the customers. Here are some of the main reasons why insurance is important for your business.
Types of Insurance for your business
From the first day you start a business, you are faced with risks. So, for this reason, you must have the right insurance in place. Here are some of the main insurance policies for a business.
- Product Liability Insurance
If your business manufactures products and puts them on sale to the public, then product liability is a must. Even if your business takes every measure possible to ensure the product is safe to use you could still find yourself in a legal case due to damage that was caused by the product you sold. Product liability insurance works to protect the business with cover also available for certain and specific products.
- Professional Liability Insurance
Professional liability is also known as E&O (errors and omissions) insurance. Liability insurance covers and protects your business in the event a negligence claim is made against you due to harm that resulted from failure or mistakes to perform. Each industry has its own set of concerns that will need to be addressed in a customised policy written for a business.
- Workers Compensation Insurance
Once you have hired employees for your business, worker’s compensation insurance must be added to your business insurance policy. This policy will cover death, treatment, and disability benefits in the event an employee dies or becomes injured while working for you. Even if your employees are performing low risk work, medical conditions or slip and fall injuries could still result in a claim that could potentially cost you your business.
- Property Insurance
Whether a business leases or owns its space, property insurance is essential. This policy will cover furniture, inventory, signage, and equipment in the event of theft, storm, or fire. However, under a standard property insurance policy, mass destruction events like flooding and earthquakes are generally not covered. If you live in an area that is prone to these incidents, you should enquire with your insurance company for a separate policy for this. A loss assessor may need to be hired to assess any property damage.
- Business Interruption
If a catastrophic or disastrous event occurred, a business operation would more than likely be disrupted. During this time, you could suffer financial loss due to your staff’s inability to work by manufacturing products or making sales. Business interruption will compensate a company for the financial loss during these events. This is especially applicable to businesses that have a physical location such as retail stores. By having an insurance policy in place, you can avoid these income losses at any time.
- Vehicle Insurance
If you own and need company vehicles for your business, you must be fully insured to protect your business against liability if an accident occurred. You must insure your vehicle with a fully comprehensive policy this will cover you in the event of a vehicle accident. If employees use their own vehicle for the business, their own personal insurance will keep them covered.
It is protection for your employees
The products you own, the service you provide, and the equipment are not only the most valuable assets you own, but it is also your employees. It is important that they are protected in the event an accident occurs. By law, worker’s compensation insurance is required. If an employee member suffers an illness or work-related injury, it will provide them with:
- Funeral benefits if required
- Medical care
Insurance is required by Law
It is required by law to have different types of insurance in place for protection. These insurance types include public liability, worker’s compensation, and more. Without insurance, you are putting your business at risk and may face financial losses if:
- A fire occurs in the building and destroys all inventory and the building you own.
- If a theft occurs and items are stolen belong to you or belong to a client’s personal information.
- A customer sues you after becoming injured at your place of business.
- An employee becomes ill or injured while working for you.
It makes your business look more credible
Having the right insurance policy in place for your business will reduce your business credibility. These policies will show your customer and contractors that you take managing risk seriously. It shows your business is safe and if something went wrong with the service or work that you provided them, you will have a way of compensating via your insurance policy. That is why home service companies have the statement bonded, licensed, and insured on their signage and trucks. It builds long term trust. It helps communicate to everyone that you will have the right insurance in place no matter accident may occur. Having insurance shows a level of responsibility on your part and the insurance company.
It protects your customers
Your insurance policy will protect your customers if you have a business owner’s policy in place. The business owner’s policy combines business liability and business property cover into one to help protect your business from:
- Product liability
- Property damage
- Bodily injury
- Personal and advertising injury
Contracts may require it
With insurance and contracts, many different variables play a part these include:
- Borrowing money to pay for equipment, operations, or buildings, the agreement on the loan will enclose an agreement for insurance.
- If you lease or rent a facility for your business, you might need to require insurance as you may not be covered by your landlord insurance policy.
Helps to Retain and Attract Employees
Having insurance isn’t just about protecting your business, it can also have a positive effect on attracting and retaining qualified employees. They are always looking for the right benefits in their package these include long-term care, life, disability, and health insurance. If you do not offer these extras, you could lose an employee to another company. Employees want to work with a company that offers a professional outlook with the security and protection that is required. It shows you are committed to protecting against events that could harm the business and protecting your employees against injury and damage caused by the company.
Business insurance will help in the event of legal cases
Every company can face legal fees and get sued so in the event of a claim and if you do not have an insurance policy in place, your business will have to pay for these costs out of your own pocket. Liability insurance will give you peace of mind enabling you to concentrate on the business itself and let the policy and insurance company do all the work. If an employee becomes injured while working on your premises and decides to sue, having worker’s compensation insurance will help pay the legal fees. If the worker ends up with a disability from the injury, worker’s compensation insurance will act as disability cover and provide them with all the benefits that they will need.
Once you have a cover policy in place, it gives you peace of mind that your business is protected. You will operate a more personal, productive, and profitable business for several years and beyond.