The importance of insuring your business
Many entrepreneurs believe that business insurance represent an additional cost that they can’t afford. Others believe insurance is unnecessary when it comes to established and successful companies. Despite the fact that business insurance can be expensive, purchasing insurance should not be overlooked by any small or large company. Insurance represents a priority and its cost should be included in the budget to avoid any potential damage that could affect your business success and continuity.
The following are the most important benefits of insurance for business owners.
Protection against significant losses
Business insurance protects entrepreneurs against the risk of having to shut down a company as a result of significant losses. For example, fires, floods and hurricanes have led to the closure of many businesses in Texas. For companies that are insured, these natural disasters will lead to the rather than permanent closure or loss of business. Companies should therefore always consider insuring against business interruption to ensure continued cash flow for their business during the closure period as a result of natural disaster.
If one of your employee is injured at the workplace or hurt as a result of one of your defective products, or if an accident occurs in one of the company’s vehicles, it could lead to the closure of company if you lack insurance against such accidents. Therefore, you should purchase insurance to protect against accidents that occur at the workplace as a result of defective products and events that may occur during day-to-day business operations, both within and outside the premises of your headquarters.
Protection against theft
New businesses, as well as large corporations, could be the target of many thieves. It is therefore necessary to secure all the property of the company in terms of new computers, furniture and other office equipment. In this regard, companies can choose replacement cost insurance, which protects the business if its equipment is stolen by compensating for the lost equipment and paying for the repair of damages resulting from the theft.
In the event that your company commits mistakes due to negligence, victims can sue the company to claim their rights, but if the company has insurance, you will avoid significant losses; A simple case can result in significant losses if the company loses the lawsuit. For instance, if the company could not afford to pay the compensation, it may expose the business assets and personal assets of the owner to the risk of liquidation to cover the costs.
In order to avoid this, business owners should consider business liability insurance to protect against wrongful practices, which would cover some, if not all, damages.
Level of coverage
The types of insurance you need to secure depends on several factors, such as the company structure, its field of operations, the value of its commercial assets, its location and whether it owns or rents its headquarters. For instance, a law firm which owns a headquarters would require additional insurance compared to a jewelry designer who runs his business from home.
- Try to purchase insurance for all your activities from one company; the policies of the employer should cover most of the insurance plans that businesses require. At the onset of the project, be sure to review your risk management plan to identify your obligations and the cost of potential accidents, then commit to this risk management analysis annually.
- Always try to choose an insurance company that is aware of the risks associated with the company.