The Most Obvious: You Could Get Sued!
We live in a litigious society. In the event of a lawsuit or liability claim, without insurance, your business could fold. Even if you win the suit, you could still struggle due to the cost of legal fees and defense. Rather than worry about what could happen, insurance will give you peace of mind, enabling you to concentrate on what truly matters – running a successful business.
Keeps Your Business Running
What happens to your business in the event of a natural disaster, such as an earthquake or flood? Insurance covers loss of property – buildings, equipment, etc. – but what about the money you lose during the time your business is closed? That’s where Business Interruption plays a critical role. It can help a business survive a serious disaster by protecting against loss of income. The way it works is that the insurer pays you the income your company would have made while it was out of action (assuming it’s due to a covered loss). It will also compensate for normal operation expenses (e.g., rent and utilities) that you would have otherwise incurred during that time.
Makes You Look Credible
Business insurance shows your prospective clients and customers that you’re a safe bet. If anything goes wrong with the work you do for them, you have a way to compensate-It builds trust.
Covers Acts of God
In insurance language, an “Act of God” is an accident or event not caused by human hands. Floods, heavy rain falls, and fires caused by lightning all qualify. This is something completely out of your control and very difficult to prevent – therefore, insure it.
Contracts May Require It
When it comes to contracts and insurance, several variables come into play:
- If you rent or lease your business facility, you may need to carry insurance, as the landlord’s policy may not cover it.
- If you borrow money to finance buildings, equipment or operations, the loan agreement will likely contain an insurance
- Client contracts may specify that you carry insurance in the event things don’t go as planned.
Because You Cannot Predict the Future
No business owner has a crystal ball hidden in a closet that can predict what might happen in the future. It would be excellent if natural disasters, injuries on the job or lawsuits never occurred, but no one can guarantee that such things won’t occur. For that reason alone, it’s best to be insured. With the proper insurance, small business owners can achieve peace of mind and focus their attention on what they do best — operating a productive, profitable and personally rewarding business for years to come.