In the United States, about 600,000 new businesses start every year. If you’re one of the entrepreneurs who just established a business, thumbs up! As a business owner, one thing you must spend on is insurance. But why is insurance important? A good number of owners are often reluctant to purchase business insurance because the monthly or yearly premiums can really take a toll on your bottom line. However, the return on investment can be worth it. Continue reading to learn why you need business insurance.
1. Mitigate Business Risks
Whether you’re planning to open a business soon, just launched, or have been in business for a long while, one thing is certain: risk. Your business could fail to beat the competition, your products could have a poor market demand, a storm can sweep away your premises, a fire can raze it down… the list of risks can go on and on.
The good news?
Insurance is an effective way to mitigate these risks. There are several business insurance products in the market, each uniquely designed to address a certain business risk. For example, if your business is located in an area prone to severe weather, purchase adequate property insurance. With this policy, your insurer will compensate you for damages and losses arising from weather damage.
2. Protect Your Business from Lawsuits
If you run a physical or walk-in business, there’s always the possibility that someone will get hurt on your premises. For instance, a customer can slip on a wet floor and break a bone. If this happens, did you know they can hold you and your business responsible for their injuries? This is because every business owner has a legal responsibility to provide a safe and healthy environment for users. While there are steps you can take to ensure such cases don’t happen, it’s better to be on the safe side. What you need to do is purchase general liability insurance. This policy will compensate anyone who successfully sues your business for compensation. Also, general liability insurance typically has low premiums and is available to any kind of business. You just need to find a good provider. If your business is in the Lone Star state, you might want to know that Texas Insurance Place specializes in contractors general liability insurance.
3. Stay Compliant with Laws
In most states, the law requires you to buy certain types of business insurance. For example, workers’ compensation insurance is a must-have in the vast majority of states. You have no option but to purchase at least the required minimum worker’s comp coverage as soon as your business brings in employees. If you don’t, regulatory agencies can shut down your business and even sue you for violating the law. And if an employee gets injured on the job before the law catches up with you, you must compensate them out-of-pocket.
Why Is Insurance Important? Now You Know
If you’ve been asking, “why is insurance important in business?” now you have the answer. It protects your business from liabilities and ensures you stay compliant with the law. Your job now is to find good insurance providers like My Key Man Insurance. Stay tuned to our blog for more small business tips and insights.