A business is always at risk—from the time it hires an employee to the time it goes fully operational. It faces many different risks that can force its closure or bankrupt the employer. Business insurance is important because it protects your company from natural disasters, lawsuits, contractual breaches, and client-related issues. One big lawsuit can wipe out a small business or force it to declare bankruptcy.
There are many types of business insurance. There are specialized types of insurance such as martial arts school insurance. Other general types of insurance policies are professional liability, property, workers’ compensation, home-based insurance, product liability, vehicle, and business interruption. The law does not require a business to have these. But the law mandates that companies must protect the welfare of its employees.
Protecting Your Employees
A workers’ compensation insurance protects your business’ most valuable assets—your employees. You need to protect them in the event of an incident that could force your employees to stop working for a while. This type of insurance provides financial support to workers who are unable to work because of a work-related injury or illness.
As a business, you can also buy unemployment insurance and disability insurance. Some states require businesses to provide these types of insurance. These ensure that the workers are financially supported if they become disabled because of the job. If the company is forced to close because of external factors, the unemployment insurance will also kick in to provide financial help to the workers.
Keeping Your Business Running
What happens to your business when there’s a natural or economic disaster? If your business is forced to close down because of unforeseen circumstances and you lose income for a while, can it survive? That’s when business owner’s insurance becomes a critical need. The way this works is that the insurance company will pay you for the income you should have made during the time you are forced to close. It would cover the workers’ salaries and benefits for up to 12 months, depending on the type you signed up for. Your business will also remain protected during this period.
Making You More Credible
Insurance tells the customers and clients that you are reliable and credible. It tells them that they can safely bet on your company. Their rights and interests will be protected, too. This is a far cry from the insecurity that clients feel when the company they are in partnership with is not insured. Many clients demand that companies show them proof of insurance. This allows them to safely invest in your company.
More than anything else, part of your attraction to candidates is your ability to offer them insurance coverage. Employees will stay with you when you can offer them great compensation packages that include health and life insurance. Aside from salary, workers are looking for companies that can offer them disability, unemployment, and long-term care. Without these, you will lose to other companies who are willing to spend on these benefits.
Your business needs insurance because you cannot predict the future. There is no way for you to know what will happen tomorrow. As an entrepreneur, it is your responsibility to protect your business interests, as well as your employees.