Running a business comes with a variety of different risks, some preventable, and others not so much. Companies could be impacted by several things, from natural disasters to a weak market causing financial problems and client lawsuits, all of which require insurance. Without insurance, businesses could be put out of business almost immediately or be forced to sell. If you are an entrepreneur yourself, it’s essential to know the significant benefits and reasons to get liability insurance for your business.
Why Insurance is Important for Entrepreneurs
Insurance provides financial security to the entrepreneur, his or her family, and the employees working for the entrepreneur. If any aspect of the business were to go south, insurance may be the make or break factor in terms of saving the company. Insurance provides safety and security to anyone affiliated with the company.
Here are the top 5 reasons an entrepreneur should get insurance for his or her business:
1. To Avoid the Potential Outcomes of Being Sued
In the event of a lawsuit, without insurance, your business could very well go under, even if you win the case. Whether it be from a broken contract or an upset employee, being sued can cost thousands of dollars, taking money away from your business, causing it to plummet. One lawsuit could be the end of your business if you don’t have liability insurance.
Getting liability insurance is a great way to protect yourself and your business from a lawsuit ruining your company.
2. To Protect and Keep Employees
Employees should be one of your top priorities as an entrepreneur and business owner. It would be best if you did all that you can to protect them in terms of insurance, whether that be with health insurance or dental insurance. Similarly, liability insurance is beneficial to your employees because if a lawsuit were to occur, your employees would not lose their jobs.
Insurance is also beneficial to you as an entrepreneur in terms of employees because it will be a major job perk, acting as an incentive for them to continue working for you as insurance is an added benefit to the job. Additionally, insurance may attract potential employees, allowing you to expand your team.
3. To Keep Your Business Running in the Event of a Natural Disaster
In the event of a natural disaster, if your business is not insured, it could be physically destroyed without the financial ability to be repaired. Whether the natural disaster was a flood, hurricane or tornado, property and casualty insurance will protect you. Investing in property and casualty insurance is important and can potentially save your business.
Property and casualty insurance will also protect your business in cases of vandalism and theft.
4. Specific Contracts May Require It
If you are an entrepreneur that is renting or leasing a space, your landlord’s insurance policy may not be enough, so having your own insurance is beneficial. Similarly, if you borrow money to finance a building or any equipment, the loan agreement will most likely require some sort of insurance requirement.
Individual client contracts may also require various kinds of insurance in case a project were to go wrong.
5. In the Case of a Workers’ Compensation Claim
According to a worker’s compensation lawyer in Philadelphia, workplace accidents take pale every single day and can leave employees with serious injuries that will prevent them from returning to work. He also points out that workers’ compensation will cover medical bills and the monetary benefits of the employee who is out of work.
If an entrepreneur/business owner does not have insurance, paying for an employee’s workers’ compensation could cost tens of thousands of dollars out of pocket, forcing the business to go out of business downsize, or even file for bankruptcy.
Protect Yourself and Your Business with Insurance
Insurance is just as imperative for entrepreneurs as it is for CEOs of major worldwide corporations. Insurance will protect your business, saving it from anything that may have the potential to negatively impact it. Keep these tips in mind as you consider the possibility of getting insurance.
Note: “According to a worker’s compensation lawyer in Philadelphia, workplace accidents take pale every single day and can leave employees with serious injuries that will prevent them from returning to work. He also points out that workers’ compensation will cover medical bills and the monetary benefits to the employee who is out of work.” came from https://www.larrypitt.com/2020/01/prevent-workplace-accidents/
Contributed by: Veronica Baxter