Whether you are just starting off or you have been in business for years, insurance is often viewed as a cost you don’t want to deal with. However, having policies with the right coverage is critical to the overall success of your business. Understanding why you need to have insurance will allow you to be smarter about how you operate.
It Might Be Mandatory by Law
Every business is a little different. According to Janet Hunt, the industry you’re in, the number of employees you have, and more will dictate what types of insurance you need. Often, it’s helpful to sit down with an independent insurance agent to discuss what insurance is required. If you have commercial vehicles, for example, you will need to have commercial auto insurance. Your landlord may dictate that you need to have additional property insurance, too. Then, you have to look at worker’s compensation insurance based on the number of employees you have.
By knowing what policies are required and recommended, you can be sure that you’re financially protected. Further, you won’t have to worry about fines from the state if you don’t have the kind of insurance you’re legally required to have.
Protection from Claims
Without the right insurance, you would be vulnerable to all sorts of claims made against you. Liability insurance protects you if someone were to sue you for an injury on your property. Liability insurance will also protect from damages that your employees caused on a client’s property. Additionally, worker’s compensation insurance protects you against claims made by your employees if they get hurt on the job. If you get involved in a lawsuit, you don’t want your business to be at risk. According to Legally Mine, the average cost for employment-related claims with a defense and settlement payment for small- to medium-sized businesses is $125,000.
Keep a Business Financially Afloat
If you operate without sufficient insurance, you could end up going bankrupt. And it’s not just about not having the right insurance — it’s also about having the right coverage. There are minimum levels of coverage that you can obtain. You can also choose to increase those levels so that you are protected against the larger claims.
There’s no need to leave yourself vulnerable. It’s impossible to know what will happen throughout your operations, which is why it’s important to have the right insurance in place from the moment you open your business. Sit down with a professional to find out what insurance is required and recommended for you.
