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Don’t Skimp on Your Business Insurance: Here’s Why

Dont Skimp on Business Insurance

Business owners are constantly on a crusade to cut the costs associated with keeping their company afloat, and who could blame them? After all, entrepreneurs who manage to cut unnecessary expenses are usually those who survive and thrive for years while their competitors struggle to make ends meet because of their hefty debts. Some expenses can’t be dismissed, however, and many business owners who are shirking business insurance are making a grave mistake that will come back to haunt them.

Here’s why business insurance is a necessary expense for everyone, and why your company shouldn’t hesitate to spend what’s necessary to get adequate coverage in its industry.

Don’t think you can avoid a disaster

Far too often, business owners argue that they don’t need to invest in business insurance because the likelihood of a disaster occurring is so minimal that they think they’re safe from tragedy. In reality, though, it’s important that you don’t think you can avoid a disaster, as many businesses have been shuttered after unexpectedly dealing with a crisis that pushed them to their operational or financial limits. Every business meets a hurdle in the road sooner or later, so having proper business insurance is a necessary part of making sure your company enjoys a long and healthy life.

Not all business insurance is the same, however, and some is substantially better than others. There are many different kinds of insurance that business owners and entrepreneurs can rely upon, but the kind of coverage you’ll be seeking is highly dependent on your niche industry and the size and scope of your business in general. It’s worth reviewing the nine essential insurance offerings that all small businesses should at least consider, as some more generic options are important regardless of who you are.

Having workers comp figured out is a necessary part of running a modern business, for instance, and similarly some states may require that you have disability insurance figured out before you open your doors to the general public. Finding out what specific requirements your locality demands from businesses is highly recommended, as many entrepreneurs have been hit with stiff fines or other legal penalties after failing to adequately cover their workers or business assets.

Many people continue to dismiss these insurance options as being unnecessary; after all, what’s the real likelihood that their business encounters a grave crisis? As it turns out, more businesses suffer from tragedy than you likely believe; a recent survey discovered that one in three small businesses faced top hazards last year which could have cost them dearly without good insurance coverage.

Even LLC’s can benefit from insurance

Some people have created an LLC for themselves precisely in order to avoid the costs traditionally associated with some businesses. Even LLC’s can benefit from insurance regimes, however, as companies of all shapes and sizes in a myriad of diverse industries face serious problems all the time that can be mitigated with proper insurance coverage. Limited liability companies aren’t always as protective as those who create them like to imagine, however, and it’s very important that you understand that business insurance is still necessary even if you started an LLC in an effort to avoid personal culpability for wrongdoing.

This is because the American legal and business environment is rife with potential dangers; aggrieved customers can decide to sue your company at the drop of a hat, after all, with a million ambulance-chasing lawyers ready to help them bring a class action lawsuit against your business for the mildest of mistakes. Having proper business insurance is a necessary expense because, like a smoke alarm, it’s something that you ignore on a daily basis that will nonetheless save you when a one-in-a-million tragedy occurs. In a tumultuous business environment where competitors and customers alike can bring you down with a lawsuit, business insurance might be the thing keeping your company up and running after you lose a case or make an expensive out-of-court settlement to avoid negative media headlines.

Business owners interested in business insurance shouldn’t just leap into bed with the first provider who stumbles by, however, but rather should do plenty of research ahead of time to attain the best possible rates and ensure that their coverage is up to snuff with the perils of their industry. Certain sectors of the economy are more dangerous to workers than others, for instance, so risky businesses may want to invest heavily in employee compensation regimes that ensure your workers are taken care of and happy no matter what happens.

Elsewhere, you’ll find that business insurance is a necessary expense because it gives you the peace of mind that you crave as a business owner. After all, nobody wants to work tirelessly to establish a commercial empire only to have it crumble at the first gust of wind. Often, business insurance is the only thing standing between your business and oblivion, so invest ahead of time if you want to avoid heartbreak in the future.

Published: May 2, 2019
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Matthew Davies

Matthew Davies is a creative and passionate HR Director with 15 plus years proven experience up to board level in international and world-class corporations. He has had the privilege of working on a wide range of projects that have enabled him to apply his leadership and technical skills and he have proven expertise in managing change, business integration and outsourcing.

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