You may have seen many advertisements stating how important business insurance is and you should get one. But why is business insurance really necessary? Here we explore the 7 benefits that business insurance offers you.
1. It can safeguard you against financial ruin due to lawsuits
Every business experiences so many risks. From product damage to equipment failures to on-site accidents, numerous problems can occur. These problems may affect customers, business visitors or employees. In such a situation, you may be sued by the employee or customer, or another stakeholder for negligence. Such lawsuits can not only ruin your goodwill, but it can also lead to costly legal expenses. Sometimes, these expenses can be in the millions.
When you don’t have business insurance, you may need to pay this money with your own money or the investors’ investments. With the business insurance, you receive financial coverage, that can help you access pay-outs that you can use to pay your legal expenses.
2. It can help you get back to work after natural disasters
Some types of business insurance policies do offer coverage for “Act of God” situations, for example, natural disasters. You can redeem the insurance policy to get money, which you can use to re-start your business.
You won’t need to tap into personal finances or get a loan with high interest.
3. It can help you meet your stakeholder obligations
Business insurance policies reduce your financial burden by giving you monetary coverage. Having business insurance prevents your need from using your own money or the business’s finances to pay out legal costs.
You can instead, use these business funds to finance stakeholder demands and requirements. This will ensure that your company continues to serve stakeholders as promised. It will prevent customer attrition or breakdown of partnerships.
4.It allows you to attract quality job applicants
Some jobs – especially those that involve the use of dangerous machinery or processes – have the immense risk of life and limb. Job applicants want to know that you have taken measures to protect them and help them, in the event something happens on the job.
Business insurance policies come with various riders for workplace injuries, equipment failures and worker’s compensation, to name a few. These policies can help you pay injured employees and families of deceased staff compensation for on-site injuries.
So, when job applicants find out that you do have such business insurance policies, they are more likely to apply to your company.
5.It allows you to reduce on-site liabilities
Sometimes, your employees may need to work outside your premises, on customer property, or on the premises of a third party. In those circumstances, you will be obligated to cover any damage that your employees may accidentally commit to the premises, property and equipment. Business insurance can help you here.
Some business insurance policies also offer coverage for stolen equipment and tools as well.
6. It’s legally mandated for you to have one
One of the most important reasons why you need to have business insurance, is that they are a legal requirement in most states in the US. If you don’t have business insurance, you may be sued by your respective State Government for willful negligence. Such lawsuits can cost you millions and have the potential to bankrupt small companies.
7. It empowers you to be prepared for the future
Finally, one of the reasons why business insurance is essential is that it gives you the power and resources to safeguard your business against any potential unforeseen event. You can continue running your business in security, knowing that your company is safe from financial harm.