Insurance is at the core of almost all business transactions. Without it, most businesses would not be willing to take the massive risks to do things like build giant buildings or do business with one another knowing that something could go wrong, and having no recourse to fix it.
Insurance gives us the confidence to take risks that we could not otherwise afford to take.
So what are the things that insurance helps your business with?
There are 4 areas where insurance can help protect your business.
Property ( your assets)
Liability (interactions with others)
Human Resources (employees)
Net Income (money in your pocket)
You have spent money on the various assets that you have. This includes buildings, furnishings, inventory, equipment, tools, vehicles, etc. What happens if that is taken away somehow? A fire burns your building. Thieves break in and steal your property. In order to stay in business, you would theoretically have to replace all of that. This requires a huge outlay of money. Whereas if you had insurance, it would compensate you for the loss of those assets so you can replace them and get back to work.
Every business by its nature will interact with other people and businesses on one level or another. We buy products from other businesses, we sell our products to consumers or other businesses, we pass people on the road with whom we don’t do any business. All of these things create an opportunity for something to happen that can have negative financial consequences for your business. If you hurt someone, or if you damage their property, in our society, we are held financially responsible.
So can you afford to pay for those damages out of the operating income of the business? What if more than one accident happens? Can you afford to pay for two accidents? What if you did nothing wrong but someone alleges that you did? Can you afford the legal fees associated with defending your business? Liability Insurance can help cover all of these costs.
Do you have employees? Employees are a major component of almost all businesses. They also can represent a large area of risk for your business. What happens if they get hurt? You as the business are not only morally responsible for that, you are also financially responsible. Most states require that an employer has Workers Compensation Insurance. But is that the only risk that employees pose to a business?
Can an employee sue your business? Can they file complaints against your business? Can they allege impropriety? Can they steal from you?
Obviously the answer to all of these questions is yes. Insurance can help mitigate the risks arising from these types of claims.
Why did you start a business in the first place? Was it so that you could put time, effort and money into and get nothing in return? Of course not. How then can you protect your net income in the event that something outside of your control goes wrong? Insurance can help with that too.
If you would like to find out what types of insurance you need to have in order to have your business properly protected, contact us and we can help you tailor your insurance program to help protect your business.