If there’s anyone who knows how risky it can be to run a business, it’s business owners. These risks are what make it so important that you take steps to protect both your personal and business assets. One such step is making sure your business is properly insured. Here are a few reasons why this is so important.
You might get sued
Lawsuits are pretty common in our society, and if you don’t have insurance in the event of a liability claim or lawsuit, it’s possible that your business goes under. Even winning a suit can be a pyrrhic victory, thanks to the astronomical cost of legal defense. Liability insurance allows you to take your mind off such matters and back to running a successful business.
Some forms of insurance are legally mandated for businesses with employees
Certain types of insurance are required by the law in the state the business is located, such as worker’s compensation, disability and unemployment. If a business fails to provide coverage that’s required by the law, it might have to pay fines, be excluded from public contracts or civil or criminal penalties. These could all prove to be far more expensive than what insurance would have cost.
It keeps your business up and running
Insurance guards your human assets. Business owners are responsible for keeping their business running. But what if you’re taken out of the picture for some time due to a heart attack or accident? That would automatically lead to a loss of income. Or it would, if you didn’t have an insurance policy in case of just such an emergency. Disability insurance coverage and company-owned life will cover the loss of the income you would have otherwise generated in such cases. Policies like these can also be bought to cover the death or disability of an important employee, in which case they’re referred to as “key person” insurance.
Similarly, what would happen to your business if a natural disaster were to strike, like a flood or hurricane? If you have property insurance, any loss of property will be covered, but what about the income you’ll lose out on for the duration your business is closed? Well, in such a case, Business Owners Insurance will protect you against loss of income, with the insurer paying the business owner the amount it would have made during the time it was out of commission.