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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.

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    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.”

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    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.

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    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.

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    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.

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    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

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    Last Updated on August 16, 2018

    10 Huge Differences Between A Boss And A Leader

    10 Huge Differences Between A Boss And A Leader

    When you try to think of a leader at your place of work, you might think of your boss – you know, the supervisor in the tasteful office down the hall.

    However, bosses are not the only leaders in the office, and not every boss has mastered the art of excellent leadership. Maybe the best leader you know is the co-worker sitting at the desk next to yours who is always willing to loan out her stapler and help you problem solve.

    You see, a boss’ main priority is to efficiently cross items off of the corporate to-do list, while a true leader both completes tasks and works to empower and motivate the people he or she interacts with on a daily basis.

    A leader is someone who works to improve things instead of focusing on the negatives. People acknowledge the authority of a boss, but people cherish a true leader.

    Puzzled about what it takes to be a great leader? Let’s take a look at the difference between a boss and a leader, and why cultivating quality leadership skills is essential for people who really want to make a positive impact.

    1. Leaders are compassionate human beings; bosses are cold.

    It can be easy to equate professionalism with robot-like impersonal behavior. Many bosses stay holed up in their offices and barely ever interact with staff.

    Even if your schedule is packed, you should always make time to reach out to the people around you. Remember that when you ask someone to share how they are feeling, you should be prepared to be vulnerable and open in your communication as well.

    Does acting human at the office sound silly? It’s not.

    A lack of compassion in the office leads to psychological turmoil, whereas positive connection leads to healthier staff.[1]

    If people feel that you are being open, honest and compassionate with them, they will feel able to approach your office with what is on their minds, leading to a more productive and stress-free work environment.

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    2. Leaders say “we”; bosses say “I”.

    Practice developing a team-first mentality when thinking and speaking. In meetings, talk about trying to meet deadlines as a team instead of using accusatory “you” phrases. This makes it clear that you are a part of the team, too, and that you are willing to work hard and support your team members.

    Let me explain:

    A “we” mentality shifts the office dynamic from “trying to make the boss happy” to a spirit of teamwork, goal-setting, and accomplishment.

    A “we” mentality allows for the accountability and community that is essential in the modern day workplace.

    3. Leaders develop and invest in people; bosses use people.

    Unfortunately, many office climates involve people using others to get what they want or to climb the corporate ladder. This is another example of the “me first” mentality that is so toxic in both office environments and personal relationships.

    Instead of using others or focusing on your needs, think about how you can help other people grow.

    Use your building blocks of compassion and team-mentality to stay attuned to the needs of others note the areas in which you can help them develop. A great leader wants to see his or her people flourish.

    Make a list of ways you can invest in your team members to help them develop personally and professionally, and then take action!

    4. Leaders respect people; bosses are fear-mongering.

    Earning respect from everyone on your team will take time and commitment, but the rewards are worth every ounce of effort.

    A boss who is a poor leader may try to control the office through fear and bully-like behavior. Employees who are petrified about their performance or who feel overwhelmed and stressed by unfair deadlines are probably working for a boss who uses a fear system instead of a respect system.

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    What’s the bottom line?

    Work to build respect among your team by treating everyone with fairness and kindness. Maintain a positive tone and stay reliable for those who approach you for help.

    5. Leaders give credit where it’s due; bosses only take credits.

    Looking for specific ways to gain respect from your colleagues and employees? There is no better place to start than with the simple act of giving credit where it is due.

    Don’t be tempted to take credit for things you didn’t do, and always go above and beyond to generously acknowledge those who worked on a project and performed well.

    You might be wondering how you can get started:

    • Begin by simply noticing which team member contributes what during your next project at work.
    • If possible, make mental notes. Remember that these notes should not be about ways in which team members are failing, but about ways in which they are excelling.
    • Depending on your leadership style, let people know how well they are doing either in private one-on-one meetings or in a group setting. Be honest and generous in your communication about a person’s performance.

    6. Leaders see delegation as their best friend; bosses see it as an enemy.

    If delegation is a leader’s best friend, then micromanagement is the enemy.

    Delegation equates to trust and micromanagement equates to distrust. Nothing is more frustrating for an employee than feeling that his or her every movement is being critically observed.

    Encourage trust in your office by delegating important tasks and acknowledging that your people are capable, smart individuals who can succeed!

    Delegation is a great way to cash in on the positive benefits of a psychological phenomenon called a self-fulfilling prophecy. In a self-fulfilling prophecy, a person’s expectations of another person can cause the expectations to be fulfilled.[2]

    In other words, if you truly believe that your team member can handle a project or task, he or she is more likely to deliver.

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    Learn how to delegate in my other article:

    How to Delegate Work (the Definitive Guide for Successful Leaders)

    7. Leaders work hard; bosses let others do the work.

    Delegation is not an excuse to get out of hard work. Instead of telling people to go accomplish the hardest work alone, make it clear that you are willing to pitch in and help with the hardest work of all when the need arises.

    Here’s the deal:

    Showing others that you work hard sets the tone for your whole team and will spur them on to greatness.

    The next time you catch yourself telling someone to “go”, a.k.a accomplish a difficult task alone, change your phrasing to “let’s go”, showing that you are totally willing to help and support.

    8. Leaders think long-term; bosses think short-term.

    A leader who only utilizes short-term thinking is someone who cannot be prepared or organized for the future. Your colleagues or staff members need to know that they can trust you to have a handle on things not just this week, but next month or even next year.

    Display your long-term thinking skills in group talks and meetings by sharing long-term hopes or concerns. Create plans for possible scenarios and be prepared for emergencies.

    For example, if you know that you are losing someone on your team in a few months, be prepared to share a clear plan of how you and the remaining team members can best handle the change and workload until someone new is hired.

    9. Leaders are like your colleagues; bosses are just bosses.

    Another word for colleague is collaborator. Make sure your team knows that you are “one of them” and that you want to collaborate or work side by side.

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    Not getting involved in the going ons of the office is a mistake because you will miss out on development and connection opportunities.

    As our regular readers know, I love to remind people of the importance of building routines into each day. Create a routine that encourages you to leave your isolated office and collaborate with others. Spark healthy habits that benefit both you and your co-workers.

    10. Leaders put people first; bosses put results first.

    Bosses without crucial leadership training may focus on process and results instead of people. They may stick to a pre-set systems playbook even when employees voice new ideas or concerns.

    Ignoring people’s opinions for the sake of company tradition like this is never truly beneficial to an organization.

    Here’s what I mean by process over people:

    Some organizations focus on proper structures or systems as their greatest assets instead of people. I believe that people lend real value to an organization, and that focusing on the development of people is a key ingredient for success in leadership.

    Learning to be a leader is an ongoing adventure.

    This list of differences makes it clear that, unlike an ordinary boss, a leader is able to be compassionate, inclusive, generous, and hard-working for the good of the team.

    Instead of being a stereotypical scary or micromanaging-obsessed boss, a quality leader is able to establish an atmosphere of respect and collaboration.

    Whether you are new to your work environment or a seasoned administrator, these leadership traits will help you get a jump start so that you can excel as a leader and positively impact the people around you.

    For more inspiration and guidance, you can even start keeping tabs on some of the world’s top leadership experts. With an adventurous and positive attitude, anyone can learn good leadership.

    Featured photo credit: Unsplash via unsplash.com

    Reference

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