Every business owner must have insurance to protect his or her company from the cost of unexpected damages. Either that or you have to pay for such expenses from your own pocket. These expenses can result from unfortunate incidences such as theft, fires or lawsuits.
The implications of not having business insurance can be pretty damaging not only to your finances but reputation as well. To avoid such scenarios, it’s advisable to have a business insurance broker on your speed dial.
If you need motivation to add this to your company’s budget, here are all the reasons why revising your insurance is a wise business decision.
Legal Requirements
Unfortunately, whether to have business insurance is not up for a debate in many countries. The law requires you to have insurance if you’re running a business.
To be quite frank, the law isn’t overly concerned about financially protecting your business in the case of unforeseen eventualities. These laws are aimed at protecting the interests of your employees with regards to medical compensation as we’ll explain shortly. Make sure you pay attention to the laws in the state you’re operating in.
What happens if having insurance isn’t a legal requirement in your state? Smart business people understand that having business insurance shouldn’t be viewed as an unnecessary expense. Rather, it’s a necessity meant to protect your business from losses resulting from:
- Lawsuits coming from a customer who is injured on your business premises
- Fire that damages your business equipment or inventory
- Theft of your company’s important data
Protect Your Workers
Not only is insurance aimed at protecting your business, but your employees too. Human resources are crucial in organisations because they determine the success—or failure—of a business. The law states that businesses are required to have workers’ compensation insurance to cover employees against the following:
- Work related injuries. The insurance policy will provide medical care to employees for falls or injuries sustained while carrying out their tasks at work.
- Illnesses suffered as a result of exposure to harmful elements at the workplace. Think of miners who work in dust and dirt environments on a daily basis. Constant exposure to such particles may result in chronic chest infections over time.
- Worker compensation insurance policies will help replace lost wages for workers who miss out on work as a result of injury or illness.
Your insurance helps you cover these important expenses.
Your Customers Are Protected Too
You wouldn’t be in business if it weren’t for your customers. This is why protecting your customers should also be part of your business mandate.
As mentioned earlier, a client might slip and fall on your premises. You don’t have to wait for a lawsuit to rectify the matter. Do the honourable thing by paying for their medical expenses. And having business insurance means you don’t have to fund the bill from your company’s coffers. A Business Owner policy will cover such incidences.
For your customers’ peace of mind, you can also consider applying for data breach insurance. Businesses such as medical practices that deal with confidential customer information must view data breach insurance as a necessity. Patient information is protected from any data breach which may result in lawsuits.
Having the above-mentioned policies will significantly increase customer confidence and trust in your business. And this works in your company’s reputation favour so it’s an investment that benefits all.
Build Credibility
Still on the subject of your business reputation, having insurance will also build your organisation’s credibility. When it comes to running a business, customer perception is important. If you have insurance, customers will view your business as professional, reliable and trustworthy.
To customers having insurance means that you’re prepared to protect them in the event of any unfortunate incidences. Who wouldn’t want to do business with such a firm that has customers at heart?
A Prerequisite to Conclude a Contract
You might find having business insurance highly unnecessary until you want a specific contract that requires you to be insured. Certain contracts require your business to have insurance beforehand although this depends on your company’s area of speciality.
A few examples of contracts that require insurance protection include the following:
- A leasing contract if you plan on renting a building. The landlord will need to know that his or her building is protected against any damages.
- Contracts that involve borrowing money from financial institutions.
- Certain client contracts require business insurance. A customer might need the building contractor to be insured before working on his or her home. Such insurance policies will protect the client in the event that damages caused by the contractor occur on the property.
Final Thoughts
Are you still sceptical about insuring your business? Think of the negative financial implications of not being insured as a business. Do the right thing: protect yourself, your employees and above all, your business.