Why Your Business Shouldn’t Neglect Insurance

Running a business comes with a range of risks. A natural disaster could damage or destroy your business property, an employee could be injured while at work, or a client could file a lawsuit, for example. Because of these and many other reasons, it’s important to have the right insurance to protect both your business and personal assets. Here are some of the top reasons why you should never neglect business insurance. 

Why Your Business Shouldn't Neglect Insurance

Legal Requirements

The law requires businesses that hire employees to provide certain insurance types, according to the SBA. If you hire employees, you will need to ensure that your business is adequately covered with workers’ compensation, disability and unemployment, depending on your state. Failure to comply with these insurance requirements could result in your business facing fines, penalties, and exclusion from public contracts. 

Protect Against Being Sued

Today, we are living in a litigious society, and there is a high risk that your business may end up facing a liability claim or lawsuit. Without insurance, this could mean the end of your company. And the sad truth is that no matter how many safety precautions you take, it could only take one accident or broken contract for a lawsuit to damage your business. Rather than worrying about prevention, liability insurance provides you with peace of mind so that you can get on with running a successful business. 

Protect Against Loss of a Key Employee

Key person insurance is an insurance policy for businesses that protects against the loss or disability of an employee that is crucial to the running of the business. This could be the business owner, CEO, a top executive or salesperson, or anyone that is critical to the smooth running of the establishment. Such insurance is needed if that person’s death would be devastating to the future of the company. In the event of an accident or the untimely demise of a key individual, the business will be secure in the knowledge that financially they will not be unduly affected and will be able to continue operations. Key person insurance is also a necessary insurance for SBA loan agreement. This means that small businesses requiring funding will need to have suitable insurance in place as collateral for the loan to provide assurance the funds will be available to satisfy the loan should the business owner die.

Improve Your Credibility

Regardless of the industry that you are in or who your clients and customers are, having business insurance from American Tri-Star insurance Inc. makes your business look more credible. The right business insurance demonstrates that you are a safe choice for your prospective clients and customers and will ensure that they know you are able to compensate them if anything goes wrong with the work that you do for them. Having insurance helps you to build trust with new customers and eliminate any doubts that they might have. 

Keep Your Business Running After a Disaster

If a natural disaster such as a flood or earthquake happened to your business premises, what would your company do? Without the adequate insurance, a natural disaster could spell the end of your business. Even if you were able to get up and running again, you might lose a lot of money during the time that your business needs to close. Business insurance can help you survive potential disasters by providing funds to get everything back to normal and cover the income that you may lose. 

Protect Your Employees

Your employees are your business’s most valuable asset, so it makes sense to ensure that they are protected. The law requires you to provide workers’ compensation insurance for your employees, but it is also worth offering other types of insurance such as disability coverage. If you are unsure of which insurance you should be providing for your employees, then you could do some calculations using this premium calculator to determine the best and most applicable amount of insurance cover for your employees. Providing the right insurance gives peace of mind to both you and your employees and can improve employee satisfaction and productivity.

No matter what kind of business you run, the products or services that you sell or the customers that you serve, the right insurance can protect you against almost anything that could go wrong. 

I am Finance Content Writer. I write Personal Finance, banking, investment, and insurance related content for top clients including Kotak Mahindra Bank, Edelweiss, ICICI BANK and IDFC FIRST Bank.