Why You Need Insurance for Your Business

Updated: May 4, 2013

I have a friend who used to own an internet café business.

Only a few months after he opened, burglars broke into his shop one night and took all his computers.

It was a truly depressing day not only for him, but for his family and us, his friends, because we knew how hard he worked to put up that business and it was gone in just one night.

That’s why when it was my turn to put up my own internet café several years ago. I never hesitated to get insurance right after I finished processing my business license.

I had it covered for fire, theft and many others – and I realized that getting business insurance may seem to be an unnecessary expense, but it’s actually something you should consider as a business owner.

And out of the many benefits I got, none is greater than having that feeling of security that an insurance plan provides.

And this is something that our guest blogger, Wilson Chandler, will talk about today. Below, he will tell you why businesses need insurance and gives you a quick overview of the different types of coverage that your business can apply for.

Let’s now read what he has to say.

Many business owners are operating under a naive misconception that they don’t really need coverage in the way of business insurance. Most large companies usually have this type of coverage, but some don’t think that insurable events could ever happen to them. These could be the famous last words of a business.

The small savings that a business can gain from remaining uncovered simply isn’t worth the risk of lawsuits and other various hardships that can occur when running a company. Here’s a list of possible benefits of getting quality insurance for your company or business.

Most Common Reasons Why Businesses Seek Insurance Coverage:

  • Work-Related Casualty
  • Workers’ Compensation
  • Health Insurance for Employees
  • Life and Disability Insurance
  • Legal Liabilities

Perhaps the most important reason why you need business insurance is that you’ll find it difficult to keep clients or employees without it. Without insurance and a business license, most of your work will come from hired contracts, but people are not likely to consider you as a reputable company. This is due to a fear from other professionals who will be uneasy at the slightest possibility that something could go wrong.

Another reason is that insurance protects you against lawsuits. This is just one of the downsides of business. Some business owners think that just because they don’t have the profit margin of larger companies – then this protects them against lawsuits, but this is not the case.

If an owner is sued or held liable for damages, they’re at risk of having their profits seized, wages garnished, offices closed, or have their assets frozen or taken away, if the court rules in favor of the plaintiff.

You might be hesitant to purchase coverage because you’re not sure what kind of policy you need. You can cover a wide range of assets, such as buildings, personal property, equipment, and anything else your company owns.

The best thing to do is contact an insurance representative that will speak with you about your unique needs and concerns. Make sure that your business isn’t derailed by easily avoidable circumstance.

The types of insurance coverage available are:

  • General Liability: for injury coverage
  • Umbrella Coverage: for anything not covered under general insurance
  • Property/Casualty: in case of death or damage to property
  • Business Interruption: compensation in case of business halt from outside forces

Simply put, a business just can’t afford not having insurance. It’s is a gamble both with your business and your financial future.

This guest post is contributed by Wilson Chandler.

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