Learn the Top 10 Reasons Why Your Business Needs Insurance
There are always dangers involved in running a company, whether it be from an employee getting hurt on the job, a natural disaster destroying property, or a client suing for breach of contract. Business and personal assets should be safeguarded for these and other reasons.
Making ensuring you and your company are well-protected by insurance is a great first step in that direction. This article will discuss ten of the most important reasons why your company needs insurance.
1. It’s the Rule of Law
Workers’ compensation, unemployment, and disability insurance are some of the mandatory coverages that the law mandates for firms employing employees, as stated by the SBA. The expense of avoiding fines, civil or criminal penalties, being blacklisted from public contracts, and “stop and desist” orders for failing to carry legally needed coverage could be much higher than the premiums for the insurance itself.
2. May Be Sued
Today’s society places a high value on bringing legal cases. Without insurance, your company could go bankrupt in the event of a lawsuit or liability claim. Just one mishap. There was just one breach of contract. A single unhappy worker is all it takes to end the working relationship.
The cost of defending yourself in court could put your firm out of commission even if you end up winning the case. Liability insurance protects you from potential losses, so you can focus on what really matters for your business: making money.
3. It Helps Your Company Stay Afloat
When a natural calamity, such as a flood or earthquake, strikes, how does your company fare? Although property and casualty insurance (P&C) will reimburse you for material losses (such as destroyed buildings and equipment), it will not compensate you for lost revenue while your firm is closed.
This is where BOP, or business owner’s policy, comes in handy. It can prevent a company from going bankrupt in the event of a catastrophic event by replacing lost revenue.
The insurance provider will compensate you for the loss of profits while your business is closed due to a covered peril. Normal operating costs (such as rent and electricity) that you would have incurred during that time are also covered by BOP. Some businesses also choose to insure their employees’ salaries for a period of time (sometimes up to a year) in the event of a loss of income.
