7 Reasons Every Business Needs Insurance
Managing a business is not only empowering for owners, it is also an exciting journey. However, running a business comes with unique risks that occur unexpectedly and often cause substantial stress. For business owners to adequately protect themselves, their assets, and the business reputation, they need a risk management strategy and the right business insurance.
At first glance, insurance looks like nothing but a stack of papers that you never plan on reading. The truth is, insurance shows up when businesses need it most - during a claim or lawsuit. It is a promise to protect you financially from expenses that would otherwise be paid out of pocket.
Not sure about business insurance? Take a look at these seven reasons why it is vital and why every business needs it.
1. Lawsuits Happen
Lawsuits are filed every day by customers, employees, and other third-parties. Even businesses that think they have strong relationships with customers have found themselves the victim of lawsuit papers. Hiring a lawyer to defend you is a costly expense in addition to the settlement that you may be responsible for. Business insurance covers legal and settlement expenses, so you don’t have to drain your assets when a lawsuit arises.
2. Gives You a Way to Stay in Business
Catastrophic events such as fires, floods, and storms are unpredictable, but they often destroy businesses and homes in their path. The cost to rebuild after an event like these can cost thousands depending on the building, location, and type of equipment you need to replace. The right business insurance will pay costs for repairs, replacement, and rebuilding so you don’t have to worry about paying the costs out of pocket.
3. It’s a Good Marketing Tool
Having business insurance shows you are a credible business that is willing to invest in your mission and vision. Customers and employees will be more willing to work with a business that has a plan in place in case something goes wrong.
4. Protect Valuable Employees
It makes sense to have insurance in place that puts employees’ interests at heart when a claim occurs. For instance, if a fire destroys your business, employees may be forced to find another job while you are closed. However, if you have business income coverage, the insurance will pay payroll expenses while rebuilding, so you don’t have to worry about losing key employees.
5. Some Contracts Require It
Depending on the type of business and the vendors you work with, certain contracts may require insurance. Review contracts to see insurance requirements and conditions before skipping business insurance. Paying a yearly premium may be the difference in having customers or not.
6. It’s the Law
Many states, like Pennsylvania, require businesses to carry workers compensation insurance with as little as one employee.
7. It Protects Customers
Certain types of insurance including cyber liability help protect customers and their privacy. If a data breach occurs, cyber liability insurance pays the costs to properly notify customers, investigate, and covers credit protection services for customers.
Deciding what type of business insurance to buy is not as easy as picking out a new office chair since every business is different and has a different set of concerns to worry about. Contact the independent insurance agent team at Rumbaugh for additional information on business insurance in PA.