Small and medium-sized businesses are the backbone of the American economy. They account for nearly 70 percent of new job creation annually. They are drivers of innovation.
They’re also incredibly vulnerable. Up to 90 percent of new businesses fail in the first 10 years.
Business insurance can protect your business from the most common causes of business failure. Here are the top seven reasons you should invest in it today.
1. Protect Your Investment
Civil unrest across the United States in 2020 cost business owners more than $2 billion in damages. Wildfires and other natural disasters routinely cause more than $20 billion in damages every year.
Few businesses, if any, can afford to pay these types of costs out of pocket. In fact, these costs, combined with the loss of income from the events that caused them, often cripple or kill businesses outright.
Government-issued loans and support for small businesses are rarely enough to help them survive and recover from emergencies. Only appropriate small business insurance can give you the protection you need.
2. Protect Your Employees
When you run a small or medium-sized business, you almost always know your employees personally. You work closely together and care about their well-being. But if you don’t carry the right insurance, you won’t be able to take care of them in the event that a catastrophe happens.
As a simple example, a single workers’ compensation claim can result in scores of thousands of dollars worth of medical and legal bills. Without the right insurance, will you be able to cover those costs for your workers? For most businesses, the answer is no.
Business insurance helps you protect your employees the way every small business owner wants to.
3. Protect Your Customers
Even the most conscientious business owners cannot prevent every accident. Sooner or later, a mistake or a slip will happen and one of your customers will be injured.
Like workers’ compensation cases, these incidents can rack up enormous bills very quickly. Business liability insurance gives both you and your customers the protection you need to address the situation without breaking the bank and bringing your business grinding to a halt.
4. Boost and Protect Your Reputation
Every customer has been burned by a service provider at some point in their past. As a result, many consumers are becoming increasingly cautious about who they choose to do business with.
This is particularly true in situations where:
- Your customers rely on your product or service to run their own business
- Customers are buying online from companies they have never visited or worked with in person
- Customers are concerned about health, quality, or safety issues related to the product
One of the easiest and more reliable ways for concerned customers to protect themselves is to only do business with companies that carry appropriate insurance. If you don’t have the right insurance, then, you are sacrificing an entire segment of your target market.
5. Lawsuits Happen
No one needs to be told that American society is more litigious today than during any previous era in history. Increased awareness of individual rights and access to resources means that more and more customers and employees are suing over perceived:
- Wrongful termination
- Other offenses
In most cases, where businesses commit offenses they are:
Unfortunately, neither innocence nor the good-faith nature of a mistake can protect your business from the staggering costs of these lawsuits. Without the right coverage, few business owners can afford to:
- Defend themselves
- Defend their employees
- Pay the fines, fees, and other penalties they may incur
Lawsu it costs are so steep that it can take just one case, legitimate or otherwise, to ruin your business’s finances.
6. It’s Required
Perhaps one of the most direct reasons for buying business insurance is that it’s often required. The law requires most businesses to carry workers’ compensation insurance for the protection of their employees. It may also call for them to carry basic liability insurance for the protection of their customers.
Other authorities often call for it, as well. If you took out a loan to get the cash you needed to start or expand your business, you will likely find that carrying several basic forms of insurance was a stipulation of your loan. Lenders want to be sure that they will get their money back, even if disaster strikes.
Other authorities that may require you to hold insurance include:
- State authorities
- Local authorities
- Landlords or property owners
- Other businesses you contract with
- Business or professional groups you belong to
Be sure to check which ones you might need.
7. Your Business Matters
At the end of the day, everything comes back to this. Your business matters. It matters to you, your employees, your customers, your community, and the larger business community as a whole.
Without the right insurance coverage, your business is vulnerable. So are you and everyone who relies on your business in any way. Business insurance is the only protection you have and can offer others against the vagaries and unavoidable disasters of life.
Business Insurance Cost
Insurance isn’t optional. It is one of the many necessary costs of doing business. That said, not all business insurance companies or policies are created equal.
It is worth taking the time to explore:
- What types of insurance your business needs
- What levels of insurance your business needs
- What you can do to your property or policies to keep those costs low
Don’t be afraid to get business insurance quotes from a variety of providers. Doing so can give you a solid grounding in what to expect.
Or, go to https://www.lopriore.com/business-insurance/ and check out their one-stop-shop full of tools to help you:
- Explore policy options
- Evaluate your current policy
- Get personalized advice from an experienced agent
Whatever path you choose, don’t delay. It can take a few days or weeks to select the right policy, transition between policies, or get your new policy into effect.
Disasters, however, are under no obligation to wait until that happens. The only thing worse than having a disaster hit while you have no insurance is having one hit just days before your new coverage kicks in, leaving you high and dry. So make getting coverage in place a priority now.
Now that you have a handle on business insurance, learn more about how to help your business thrive. Explore our blog for more great articles today.