Advertising
Advertising

10 Reasons You Should Have Business Insurance

10 Reasons You Should Have Business Insurance

Every business is different, and therefore the insurance needs of every business are notably different. However, there are practical rules about the general insurance needs of a business.

The Small Business Administration devotes several pages to advising business owners on the types of insurance they can purchase, and suggests that, at a bare minimum, small businesses of varying legal structures should carry liability insurance.

4129417663_425f8b78ee_z

    So what does the term “business insurance” cover? While there are a wide variety of types of insurance that fall under this designation, the SBA defines it as insurance that “protects your investment by minimizing financial risks associated with unexpected events such as a death of a partner, an injured employee, a lawsuit, or a natural disaster.”

    Advertising

    Business insurance offers a spectrum of coverage that includes protection for liability issues, property loss, vehicle use, fidelity (such as bonding), workers’ compensation, business interruption insurance, and key person insurance, as well as other less well known options. Here are 10 reasons for you to get business insurance coverage today:

    1. You can’t protect yourself from lawsuits happening.

    You have great clients. In fact, your clients are the best in the world and they would never sue you. If this mindset sounds familiar to you, you may be erroneously reaching the conclusion that you don’t need business insurance. Lawsuits have many causes and effects. Unfortunately litigation is often used strategically to protect or identify liability.

    If the work you do for a client is a part of a larger contract, your client might be obligated to sue you in order to eliminate their liability. In other words, your client may have no other legal option than to initiate a lawsuit against you. Without proper insurance, you might find yourself paying hefty legal fees to defend yourself.

    2. You have substantial investments in equipment, property, or inventory.

    Most businesses require some sort of infrastructure to keep them moving. A boutique retail location might need significant tenant upgrades or investment in merchandise. A graphic designer or photographer might invest heavily in equipment or technology. A carpenter or artisanal chef will probably have considerable financial investment in necessary tools of the trade. A business insurance policy offers protections that a personal insurance policy will not and may protect your business in case of theft, damage, or other disasters. This type of coverage ensures that your business can replace or repair property in a timely manner.

    Advertising

    3. You have contracts with your clients.

    Many business owners believe that their contracts are so solid and ironclad that courts of law will be avoided completely. Unfortunately, even arbitration can require costly legal representation or advisement. While responsible business owners will continue to depend on contracts as a method to delineate expectations and agreed-upon outputs, contracts do not solve every conceivable problem. Complications happen and sometimes lawsuits are unavoidable. Business insurance may includes errors and omissions insurance to protect your company in times of need.

    4. You had business insurance, but let it lapse.

    Due to other priorities, you let your coverage lapse. Gaps in coverage are almost bad as no coverage at all. Insurance works best when there are no gaps in coverage. While your efforts and expertise contribute to your success, the reality is that there are too many variables you don’t and can’t control. Insurance protects your business when and if those factors go sideways.

    5. You have employees depending on you.

    Once you have employees, your responsibilities become more substantial and there are types of insurance that your business is legally obligated to obtain, including, in most states, workers’ compensations insurance. There are other forms of insurance available to businesses that can protect your employees’ livelihood such as liability insurance, which can offer financial protection by making payment on a judgement, removing the financial burden from the company’s concern.

    6. Your business model depends heavily on the experience or knowledge of one person.

    Just when you think that insurance offerings could not get any more diverse, you discover key person insurance. This insurance provides assistance if a key employee (such as you as the business owner) becomes ill, injured, or deceased. This insurance product protects the business while the key person recuperates or in the event a search for a successor becomes necessary.

    Advertising

    7. You don’t think you have enough assets to make it worthwhile.

    In the case of sole proprietorship or even a corporation — this business structure may not completely shield personal assets — you may be on the hook for judgments against your business and those findings can follow and hinder you until they are paid or discharged. Even with limited assets, a determined assignee could wreak havoc on your credit, making it difficult to begin anew.

    8. You want peace of mind.

    You’re a pretty lucky person and you don’t live in a part of the country where disasters are likely to hit. Unfortunately, wishful thinking does not provide as much coverage as a real plan. There are many factors outside of your control and the best way to assure peace of mind is to take responsible action. An experienced agent can help you discern what is vital and essential for the longevity of your business.

    9. You want to reduce your business risk.

    The main problem with this mentality is that accidents happen. There is simply no way to prevent every possible permutation of calamity from occurring. While an ounce of prevention may be worth a pound of cure, the best prevention can be to plan for the worst and hope for the best. Then instead of pouring energy into avoiding the unforeseeable, you can divert that energy into building your business.

    10. You are considering securing a loan for your business.

    Your company is ready for expansion, but you hit an obstacle when you apply for the business loan that will help you build your venture. Your lender either balks at your business loan application or wants to charge your company an unwarranted interest rate due to your lack of business insurance coverage. Business insurance is an established way of managing risk and demonstrates to lenders that you value protecting your investment over saving a few dollars.

    Advertising

    As you can see, there are ample reasons to invest in business insurance. Simply wanting to protect what you’ve built and invested in should be reason enough.

    Featured Photo Credit: EDMONTON ALBERTA STREETCAR ADVERTISING PLACARD 1926 —PIC 1 by Jerry “Woody” via Flickr

    Featured photo credit: A Better Business/Jo Jakeman via flickr.com

    More by this author

    10 Reasons You Should Have Business Insurance

    Trending in Entrepreneur

    1 How to Start a Small Business From the Ground Up That Thrives 2 How to Become an Entrepreneur (Advice from a Serial Entrepreneur) 3 How to Succeed in Business: 10 Skills Every Entrepreneur Needs 4 25 Important Investment Books Every Entrepreneur Needs to Read 5 How to Start a Startup Fast: 5 Essential Steps

    Read Next

    Advertising
    Advertising
    Advertising

    Last Updated on August 10, 2020

    10 Things You Should Do If You’re Unemployed

    10 Things You Should Do If You’re Unemployed

    Regardless of your background, times today are tough. While uneven economies around the world have made it incredibly difficult for many people to find work, the recent COVID pandemic has made things worse.

    Regardless of age and qualification, stretches of unemployment have affected us all in recent years. While we might not be able to control being unemployed, we can control how we react to it.

    Despite difficult conditions, there are many ways to grow and stay hopeful. Whether you’re looking for work, or just taking a breather between assignments, these 10 endeavors will keep you busy and productive. Plus, some may even help push your resume to the top of the next pile.

    Here’re 10 things you should do when you’re unemployed:

    1. Keep a Schedule

    It’s fine to take a few days after you’re finished at work to relax, but try not to get too comfortable.

    Advertising

    As welcoming as permanently moving into your sweatpants may seem, keeping a schedule is one way to stay productive and focused. While unemployed, if you continue to start your day early, you are more likely to get more done. Also, keeping up with day to day tasks makes you less likely to grow depressed or inactive.

    2. Join a Temp Agency

    One of the easiest ways to bridge the gap between jobs is to find temporary work, or work with a temp agency. While many unemployed people job hunt religiously, rememberer to include temp agencies in the search.

    While not a permanent solution, you will be in a better position financially while you search for something permanent.

    3. Work Online

    Another great option if you’re unemployed is online work. Many different sites offer a variety of ways to make money online, but make sure the site you’re working for is reputable.

    Micro job sites such as Fiverr and Upwork as well as sites that pay for you to take surveys, are all quick, legitimate options. While these sites sometimes offer lower pay, it’s always better to move forward slowly than not at all.

    Advertising

    Here’s How to Find and Land a Legit Online Work from Home Job.

    4. Get Organized

    Unemployment is an excellent opportunity to get organized. Embark on some spring cleaning, go through old boxes, and get rid of the things you don’t need. Streamlining your life will help you dive head first into the next chapter, plus it helps you feel like your unemployed time is spent productively.

    Try these tips: How to Organize Your Life: 10 Habits of Really Organized People

    5. Exercise

    Much like organizing your life, another good way to keep yourself enthusiastic and healthy is to exercise. It doesn’t take much to get slightly more active, and exercise can help you stay positive. Even a walk around the block a few times a week can do a lot for keeping you motivated and determined. If you take care of yourself, you can make the most of this extra time.

    6. Volunteer

    Volunteering is an excellent way to use extra time when you’re unemployed. Additionally, if you volunteer in an area related to your job qualifications, you can often include the experience on your resume.

    Advertising

    Not only that, doing good is a true mood booster and is sure to help you stay optimistic while looking for your next job.

    7. Improve Your Skills

    Looking for ways to increase your job skills while unemployed is a good way to move forward as well. Look for certifications or training you could take, especially those offered for free.

    You can qualify more for even entry level positions with extra training in your line of work, and many cities or states offer job skills training. Refreshing your resume, and interview and job skills may make your job hunt easier.

    8. Treat Yourself

    Unemployment can be trying and tiring, so don’t forget to treat yourself occasionally. Take a reasonable amount of time off from your weekly job hunt to recharge and rest up. Letting yourself rest will maximize your productivity during the hours you job search.

    Even if you don’t have extra money for entertainment, a walk or visit to the park can do wonders to help you go back and attack your job hunt.

    Advertising

    9. See What You Can Sell

    Another good way to bridge the gap between jobs is to sell unused possessions. eBay and Amazon are both secure sites, but traditional garage sales are a fine option too. Sell off a few video games, or some electronics, for some quick and easy cash while you figure out a permanent solution.

    10. Take a Course

    Much like training and certifications, taking a class can be a good way to keep yourself sharp while unemployed. Especially when you’re between jobs, it can be easy to forget this option, as most courses cost money. Don’t forget the mass of free educational tools online: 25 Killer Sites For Free Online Education

    Keeping your brain sharp can help you stay focused and may even help you learn some new, relevant job skills.

    The Bottom Line

    While unemployment numbers are still high, there are many things you can do to better yourself and move forward. While new skills to aid your job hung might seem out of reach, there are plenty of free ways to get ahead, online and off.

    Additionally, don’t forget that taking time for yourself can do wonders for keeping you productive in your job hunt. While it is a challenge, don’t give up–being unemployed can offer you extra time to better yourself, and possibly grow more qualified to find work.

    Job Hunting Tips

    Featured photo credit: neONBRAND via unsplash.com

    Read Next