75% of businesses in the United States are uninsured by 40% or more. And that’s a concerning statistic when you consider how many hazards and risks come with running a business of almost any type.
Countless things can go wrong when running a business, some of them entirely out of the control of the entrepreneur that’s running it. That’s why smart owners understand the importance of having the right type of insurance, which comes with numerous benefits that stretch through all areas of running the company.
But how exactly can business insurance help you? And why is it so important? Let’s go through five of the most convincing reasons below.
It helps you stay compliant
In many cases, having business insurance is more than just about peace of mind; it’s just as much about actually being able to operate in your industry without becoming liable should something happen.
When you take out an insurance policy, you also get your proof of insurance, which is a document that you can be requested to show when working with vendors, partners, clients, or anyone else.
Having this document shows people you work with that your business is protected from risks and that you can be trusted as a reliable partner. Besides being necessary for compliance, this will also contribute to building trust and getting partnerships signed off.
Whether it’s protecting your employees, your assets, or anything else, having business insurance and proof of insurance will come in handy throughout all areas of running your company.
Protects you against litigation
Going through litigation processes as a business is a possibility that you can’t ignore. Even though most companies hope to avoid getting sued, it can happen, and no one is protected from those types of circumstances.
Whether it’s a disgruntled employee, a work accident, or even a failure of your product, you need to be prepared to deal with the aftermath without putting your entire company at risk.
Luckily, business liability insurance can help you stay in front of any potential lawsuits, providing you financial coverage for legal costs or even the potential financial damage you would have to suffer.
What’s more, it allows you to operate according to your principles, knowing that you will be able to protect your rights as a business should the need arise in the future.
Gives you peace of mind
As a business owner, you want to be able to focus on running the actual company instead of having to worry about the unlikely (but devastating) possibilities that might put you out of business.
But unfortunately, no matter how careful you are, you won’t be protected from natural disasters or fires. And these types of events can cripple even the most successful business, with the loss of revenue and repair costs often being more than a company can handle.
Luckily, with the help of disaster insurance, you can protect your business from unexpected events, knowing that you will be covered in case something goes wrong. The insurance can cover both your loss of revenue and expenses that you’ll incur while trying to repair your assets and get the business going again.
However, the issue is that many businesses fail to consider the possibility of a natural disaster derailing their entire business, only coming to realize that they should have gotten it once the disaster actually occurs. Part of the reason why this is the case is that disaster insurance is not mandated by any laws, so businesses have the choice of whether to opt for it.
But while it may seem appealing to save a bit of money and hope for the best, smart business owners know that some risks can’t be protected against without insurance, and disasters are definitely on the list.
Builds trust with your customers
When choosing which company to work with, customers need to consider a lot of aspects. The company’s reputation, the quality of its products or services, and the price are just some of the things most buyers think about.
But another often overlooked aspect that plays a role in which companies are more popular is insurance. While it may not be as obvious, having comprehensive insurance can give your customers peace of mind since they know that you are evaluating risks correctly and will remain protected if something goes wrong.
For instance, when working with more extended contracts, customers want to know that if something were to happen, you would be able to either recover quickly or compensate them for any damages. And with a comprehensive insurance package, you can rest assured that it will be the case.
Protects your employees
Even though there are many assets that a business can accumulate, none of them are as important as the people who work in your company. They are the ones who ensure that the business keeps moving forward, bringing their effort and ideas to the company and contributing to its success.
Therefore, it’s only fair that you treat your employees accordingly, valuing their presence and setting up a policy to protect them in case of work accidents or other issues that might arise.
Workers comp insurance is mandatory, but it’s not the only option you should consider. Today, you can also get robust disability insurance for your employees, giving them long-term protection if something happens at work.
And when current and prospective employees know that you value them and are actively investing in their wellbeing, your company will become a much more attractive place to work in. And that in itself can have a massive impact on the level of talent that your company can attract.
Business insurance is a complicated subject that can get overwhelming quickly. But no matter how small or big your company, you need to understand the types of insurance you could get and which options make the most sense.
Besides the mandatory business insurance that you must have in order to operate, there are additional options such as disaster insurance or disability coverage that will help protect your assets and keep your employees happy.
And while they might cost a bit more, opting for these additional options is almost always worth it, since it’s the only way to remain in control of the risks that your business is exposed to.