Whether you are the owner of a start-up or a multinational company, you might be familiar with risky decisions and their opportunity cost. Businesses are always involved in risk regarding any decision taken, be it launching a product, going for a merger, or an acquisition. As an entrepreneur of a start-up, you can’t hope to succeed without some amount of risk in each step.
But, sometimes, those business decisions can backfire, and they can result in liability claims or damage costs that can make your business go bankrupt. So how do you protect your business while moving forward with risk-taking decisions? Simple, you opt for business insurance to act as a shield protecting your business from shutting down on its own.
What is Business Insurance?
Business insurance is a plan that will provide your business coverage during a financial crisis when the business might be having low profitability, incurring losses, or on the verge of going bankrupt. It can also cover for risks associated with employee-related or for any property damage.
Types of Business Insurance
Within business insurance, there are seven types of policy plans that you can opt for:
- General Liability Insurance
- Home-based Business Insurance
- Product Liability Insurance
- Professional Liability Insurance
- Commercial Property Insurance
- Equipment Breakdown Insurance
- Business Interruption Insurance
Now some of you might be skeptical about the necessity of having a business insured. You might come up with the idea of not making risk-taking decisions. But, that means you won’t be working on making your business progress. So here are four reasons why you need to get your business insured.
1) Another Source of Business Income
A business income can come in handy through dependent properties and franchises via business insurance. That way, businesses operating in the retail industry can earn another stream of income from dependent properties if a risk is incurred with a third party, causing great losses at the store. Let’s look at an example to understand the context of this better. Your business is affected by product quality and quantity when the manufacturer or supplier’s stores shut down unexpectedly. That causes them to be unable to deliver you the raw materials needed for your products. In such cases, switching to another manufacturer or a supplier is time-consuming. So a gap enters, which can become a financial crisis if your business is not insured.
2) Businesses are required by Law to Provide Policy Benefits.
Most states require businesses to provide policy benefits to all their employees. That’s where business insurance comes in because it can take the shape of providing workers’ compensation insurance and disability insurance. This also applies to any business that owns vehicles for which it is required by law to purchase commercial auto insurance. Commercial auto insurance is a type of accident insurance provided by your business to an employee in the event of incurring an accident. Hence, a business insurance policy will cover workers’ compensation, theft, injured worker’s lost wages.
The failure to provide your employees with these types of policy benefits can result in heavy fines, civil or any public penalties. It can also comprise of you getting excluded from different types of public contracts. The worst part about all this? You would be fulfilling all these costs from your personal funds, which can be double or triple the cost of any business insurance policy.
3) You Are More Vulnerable To Getting a Lawsuit
Businesses that are not ensured are more likely to be in trouble for getting a lawsuit. This is because employees will not turn a blind eye to the fact that there is no workers’ compensation in the company provision of benefits. That can cause them to sue you and for you to land in the court filling out lawyers’ fees to keep your business running. However, we all know that fighting in court can be a long and tedious process with many funds injected without guaranteeing the desired result. One disgruntled employee or one broken contract can cause to land in a lawsuit. Even if you win the lawsuit, the cost you paid for legal defense can cause your business to go bankrupt.
So rather than worrying about all these mishaps, getting business insurance can cause you to make decisions worry-free and for you to have happy and satisfied employees.
4) Adds to your Credibility
We all want businesses to attract investors, employees, and customers. So one major way to achieve that is by getting your business insured. Usually, the first thing that investors and employees look for is whether you have business insurance that can protect their investment and salary during any type of financial crisis. It also shows you as a safe bet because if anything goes wrong in your work, you can compensate them via business insurance.
This is especially important for a business that deals with in-home services. You might often see the term ‘insured’ mentioned in their taglines, which is gaining trust. After all, this is the currency of modern-day businesses, without which they will face difficulty landing investors and employees.
Wrapping Up
By now, you would have a fair idea of how business insurance helps put your worries to rest when it comes to your business. Trust and security are one of the primary things that people look for when dealing with a business. Financial crises are already hard enough, but incurring extra costs due to the absence of business insurance can be even harder.
That is why ACE Insurance provides you with all types of business insurance packages catered to your needs. You can rest assured that your business will have an additional shield to safeguard it against any bankruptcy or losses. At the same time, making your business credible and attracting investors and employees.
All you need to do is reach out to us here for a free quote and an online consultation.