Running a business without any type of insurance puts you at serious risk for loss. A recent survey shows that 75 percent of small businesses dealt with an insurable event in 2020. With the future more uncertain than ever, it’s crucial to make sure you’re protected. Taking the necessary steps to get your business covered could be the deciding factor between success and failure for your business. If you aren’t covered for losses incurred by damages or other events, the chance for recovery is much lower. Sometimes insurance isn’t even an option, depending on where you operate.

Many states will not allow businesses to operate without insurance. The reason for this is to ensure the safety of community residents and local business patrons. While the legal aspect might be the driving force behind an inquiry, there are many other reasons to consider business insurance. If your state doesn’t require insurance, you should definitely consider these factors before you decide to forego any coverage.

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Understanding Property Damage and Liability

When it comes to business insurance, the two main areas of focus are property damage and liability claims. Property damage can include anything from your favorite office stapler to your building’s exterior. When you protect yourself from costs associated with property damage, you put yourself in a much better position to recover from any unexpected events. Property damage can occur in several ways, and insurance policies can become more specific depending on the operating environment. If you are able to identify any existing or potential vulnerabilities, chances are near certain that insurance is right for you.

While property damage tends to refer to the physical entities tied to the business, liability can refer to financial debts or any type of obligations that fall within the scope of business operations. Liability claims can arise for a multitude of reasons depending on the nature of the business. Someone in the construction business might have different concerns than someone working in software development, however, all business owners share the same responsibility of liability as it pertains to their business. If protection of your physical property isn’t motivation enough, insurance will protect you and your business from any claims that might come up.

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Protecting your employees

As a business owner, you should want your employees to feel like they’re working in a protected environment. Productivity has a direct correlation with how employees feel in the workplace, so it’s really in your best interest to make this a priority.

There are a few different ways in which business insurance benefits your employees. If a lawsuit comes up, liability insurance will protect them from any loss of income. This is enticing and gives employees a reason to stick around, and for new hires to choose your company over other opportunities. You can think about this as a huge relief on your end as well.

Worker’s compensation is also a big deal when it comes to liability in the workplace. Depending on the nature of your business, employees might be exposed to different risks. Whether your business deals with transportation, construction, or even entertainment, no industry is immune to risk. While the degree might be different, there’s always a need to keep your employees and your company, covered.

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Natural Disasters

Most regions are at risk of natural disasters in one form or another. Tornadoes, hurricanes, floods, earthquakes, even tsunamis are all real concerns depending on where you live and do business. Even if it sounds like a far-fetched idea, there’s nothing wrong with preparing for the worst. Successful business owners need to be adaptable and one of the easiest ways to ensure your company will have a speedy recovery is being covered for natural disasters.

FEMA reports a shocking 75 percent of small businesses lack an emergency disaster plan. Considering how much media coverage natural disasters typically get, it’s shocking to think that only a quarter of small businesses has a real disaster plan. The same findings by FEMA show that 40 to 60 percent of small businesses need to close for good after a disaster. It seems like once a business has to close its doors for repairs, its chances for opening back up get smaller with each passing day. Simply put, if you don’t have a plan in place, you are willingly putting your business at risk.

The easiest place to start implementing a plan is with an insurance policy. Not only will this help you start to put together a holistic disaster plan, but you’ll be able to gain more insight into the value of your business.

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Lawsuits

Every single business transaction involves an amount of risk. Companies must abide by rules and regulations in order to maintain the right to conduct business. These regulations are set with the intention of protecting consumers in the marketplace. Whether you offer products or services, there’s a good chance you will face at least the threat of a lawsuit in the future.

A recent study shows up to 53 percent of businesses reported issues involving lawsuits within a given year. While that number doesn’t indicate the lawsuits were successful, over half of all small businesses are reporting being sued in any given year. If you want your company to be in the category of lawsuits that were dropped, you’ll want to invest in some business insurance to protect you from liability claims that might arise from your business.

All it takes is one lawsuit to completely upend a business. You could have decades invested into your company and one mistake could lead to a lawsuit that you can’t afford to recover from. No matter your industry, you are always at risk of being sued by customers or even business partners.

Chances are you work hard at your business every day, so make sure to protect that effort with the right business insurance policy. This way, you can continue doing what you do best, with the peace of mind that you won’t be caught off guard by any legal action.

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Conclusion

Business wouldn’t exist without risk; it can even be used to measure the value of a transaction or investment. Starting a small business carries a huge amount of financial weight for the owner and often has a direct effect on their personal finances. While the reward is completely worth the hard work and uncertainty, it’s important to stack the odds in your favor. You never know what might happen in your personal life, so ensuring you prepare as best you can in your business life will help protect you from damaging loss. A protected, thriving business definitely makes other hardships easier to swallow.

You can’t put a price on peace of mind, and business insurance will give you just that. You should want to protect your business just as much as you would a loved one. At the end of the day, your business exists to help you provide for yourself, your family, and your employees. So, protecting your business will indirectly protect all the most important people in your life as well. With all this in mind, it’s hard to come up with any reason not to look into a business insurance policy today. You truly never know what tomorrow brings, and when the future is uncertain, it’s important to take control.